There are no geographical limitations in today’s world. Prosper aims to support its clients to truly branch out and enjoy the business opportunities all around the world.
We are able to provide this support function with the help of our diverse team of consultants who are Citizens of the World themselves.
We understand the international business environment and global culture. We can help you work with people from other countries while advising you about any possible tax ramifications of international deals. International tax compliance is our specialty. We have your back when you enter international waters so that you don’t need to worry about making any costly mistakes.
Dual citizenship comes with quite a few perks. It makes travel easier, lets you work overseas and gives you a voice in multiple elections. However, dual citizenship can also complicate your taxes.
According to the IRS website:
“If you are a U.S. citizen or resident alien, the rules for filing income, estate, and gift tax returns and paying estimated tax are generally the same whether you are in the United States or abroad. You are subject to tax on worldwide income from all sources and must report all taxable income and pay taxes according to the Internal Revenue Code.”
As a US citizen living abroad, you will likely have to file taxes with both the US government (based on your citizenship) and your country of residence. And because the US taxes the worldwide income of its citizens—not just US-source income—many dual citizens are also at risk for double taxation.
The good news is that the US has a number of tax treaties and deductions in place to help dual citizens avoid double taxation. These treaties set out how much income can be taxed by each country and determine which country has the right to tax specific types of income. We make sure that you utilize all legally available modus operandi and, like all expats that we consult, you can avoid double taxation entirely. Our international tax compliance experts are alwayd equipped with the most up-to-date information about international tax laws and regulations and ready to assist you to stay compliant in this complex environment.
But don’t forget that you will still have to file an annual tax return even if you don’t owe anything.
Good strategy is key to success in an ever-changing global environment. Our strategic approach to international tax compliance enables our clients to create a strong foundation and avoid costly mistakes.
The Foreign Account Tax Compliance Act (FATCA) requires U.S. citizens to file annual reports on any foreign account holdings and pay any taxes owed on them with the goal of stopping tax evasion.
While it is not illegal to maintain an offshore account, failure to disclose the account to the Internal Revenue Service (IRS) is illegal since the U.S. taxes all income and assets of its citizens on a global scale.
Steep penalties are imposed on U.S. residents who do not report foreign account holdings and financial assets that exceed $50,000 in value in any given year.
If you are a resident alien, the rules for filing income, estate, and gift tax returns and paying estimated tax are generally the same whether you are in the United States or abroad. Your worldwide income is subject to U.S. income tax the same way as a U.S. citizen. You are a resident alien of the United States for tax purposes if you meet either the green card test or the substantial presence test for the calendar year.
Non-resident aliens are taxed only on their income from sources within the U.S. and on certain income connected with the conduct of a trade or business in the U.S. They are taxed on earnings received while living in the U.S.