Jeff, from what this worksheet says, you can put money into a Roth IRA
You’ll need Adobe Acrobat to read it, go to page 53 and check it out.
Thanks Okami, I will take a look at that, if so I want to write a nasty letter to the IRS because they told me I couldn’t do it. And of course this is where your document is coming from, if it is true what you say I will be even more pissed at them. Thanks again
Glad to help my fellow American be it investing, tax evasion, or some other illegal activity, though this is very legal.
I’ll now slink back to my money laundering business now. Those Japanese get even more upset than the Colombians if there money is late.
CYA
Okami
I agree Wolf, it sounds so incredibly stupid that I didn’t believe even the US government could come up with such a plan. But check out the following from today’s NY Times:
Senate Adopts a Tax Cut Plan of $350 Billion
WASHINGTON, Friday May 16
Can someone please post the bill number for this?!?!?!
[quote=“ar-grp”]the more things change the more they remain the same.
folks, we are seeing politicians in their true glory as they practice the number one rule of American politics: pick on those least likely to put up a fight. how many overseas Americans vote in elections? [/quote]
What was that slogan you guys used to have ? Oh yeah, “No taxation without representation”.
Are you guys honestly going to file a tax return ? What happens if you don’t ? Does the AIT come round and beat you up ? How can they prove how much you earned ?
I’m so bad with taxes that I’d have to hire a professional to help me with a 1040EZ form. I no longer use the 1040EZ form, but I have hired a professional tax preparer to file my tax return annually for years. My understanding is that the danger in not filing a return annually is that all US citizens are subject to potential random audits and in such an audit they can request to look at the past 6 or 7 years of tax returns, and there’s a fairly substantial penalty for failing to file.
Of course the insanity in repealing the overseas exemption is that (a) it doesn’t make sense for us to pay for roads, schools, police, fire and other services that we’re not using, (b) we would be subject to double taxation if we had to pay in the US and Taiwan, nad © according to the NYT article all this would be in order to give tax cuts to the wealthiest americans. :?
The thing with US tax returns is that if you do not file every year, even if you have no income, there is no statute of limitations on how long the US IRS can come after you. You could be outside of the US for 50 years and go back and they could still arrest you or penalize you for back taxes owed from 50 years ago.
However, if you do file, the IRS only has 3 years to challenge your filing. After 3 years it is a moot point, even if there were gross mistakes of you lied your ass off, the statute of limitations has ran out and they can not got do anything to you. That is why it is always better to file, no matter how late the return is.
Right now (knock on wood) they do not link the IRS to Immigration. I rue the day that you enter the US and at the Immigration counter they screen your passport ID number against the IRS database and detain people that have not paid taxes…or worse yet, they stop renewing your passport or adding more pages if you have back taxes owed or have not filed a return.
It is only a matter of time…
One reason they’re doing it is because of the “rich Americans” who try to spend just enough of their time overseas to avoid paying income tax.
MT,
I haven’t filed a return since I came to Taiwan, my accountant said there is no need because I am not making enough money even with interest on my bank accounts to file a return… Should I worried?
[quote=“JeffG”]MT,
I haven’t filed a return since I came to Taiwan, my accountant said there is no need because I am not making enough money even with interest on my bank accounts to file a return… Should I worried?[/quote]
JeffG,
I agree with FEI… in principle, you should file whether you owe or not. I THINK (am not certain) that only those whith incomes under US$ 7,700 are exempt from the requirement to file.
JeffG,
If you read the IRS website they require a return to be filed, even if you do not make enough money to have to pay taxes. They still require the proof.
JeffG,
Just looked this up on the IRS website, it is a questionnaire you can use to understand if you need to file or not. Hope it helps.
FEI
Thanks FEI,
I have just run through the questionaire and the end result was that I do not have to file. I have less than USD$250 of taxable income (interest) from my banks and will have no money coming back to me. I have not earned any other money in the US. So according to this I don’t need to file, however I am going to write them a letter and find out for sure. Thanks for the information!
One reason they’re doing it is because of the “rich Americans” who try to spend just enough of their time overseas to avoid paying income tax.[/quote]
Rich Americans who try to avoid income tax by spending just enough time overseas still have to pay taxes. It is the poor ones that can currently avoid paying any taxes by spending just enough time overseas. Remember currently there is only a tax on income above $80,000 no matter how many days you spend out of the country. Below $80,000 and no tax. Perhaps you mean they spend just enough time overseas to get the $80,000 exemption. Well, as far as I know, isn’t it something like, over 300 days must be spent outside of the US to qualify as a non-resident? In other countries it is only 6 months.
What could be the effect though, is all of those Chinese from Hong Kong, Singapore and Taiwan that go back and forth between the US and Asia trying to spend just enough time inside the US to maintain their green card resident status so that they can get a US passport. Now all of those Chinese that already have US passports are in a for a big shock when they find out that they must pay tax now, even though they live in their home country of Taiwan or Hong Kong. They must be thinking they should have gotten UK, Australian, New Zealand, France, Germany or any other country in the world that doesn’t tax their citizens when they don’t live there, no matter how much they make!
I don’t think this is taxation without representation, we still have representation, but maybe we do need a congressman or senator just for all of the overseas Americans. Wouldn’t that be cool?
I am afraid a majority of Americans would agree that we should be taxed. They probably even see us as unpatriotic, since we don’t even live in 'merica. The politicians don’t care because we are spread over so many voting areas that our votes don’t mean much and since it is not even easy to vote from overseas and maybe there are a lot of us that don’t even vote. Therefore, Washington can tax us to pay for their tax cuts for the wealthy without worrying about the damage that can be done by us to their re-election!
JeffG,
Glad to help, even though I am no tax expert, I did a lot of reading up this year since this is my first one outside the US. It was just complicated enough that I went to a professional tax preparer in Taipei because half my income was from the US and half from Taiwan, and all of my Taiwan income was repored on my 1040 form. For US tax purposes it doesn’t matter where the money was earned, domestic or international. They want to see your total income. If your US interest income ($250) is your total income than I would not worry, but if you are pulling down a salary in Taiwan greater than ($7,700US/year) I would double check.
FEI
I agree with Tigerman and FEI that the below $7,700 exemption applies to all income of any kind no matter where it is earned. Anyone who earns more than that must file a return, whether they are required to pay taxes or not. While I’m pretty ignorant about tax matters, my US tax guy has been filing returns for me annually since I came here and I believe he is honest and competent and wouldn’t require me to do that if it was not necessary.
So, I guess you will soon be arguing with Rascal, as per Okami’s prediction… 
I’m pretty sure that the instructions for the 1040 and 1040EZ have a special section detailing the criteria for determining whether you have to file or not. At the IRS website, you can download PDF files containing the instructions for the corresponding form.
Recently, I have had absolutely no income in the US other than about $5 in interest from a bank account. The reason I file is because I have a steady job in Taiwan, and make over the minimum amount of income that requires you to file.
Besides doesn’t the 1040EZ only take about 5 minutes to fill out, assuming you’ve done it before?
I don’t agree. In my opinion, it is taxation without representation. Did you know that not a single congressman represents Americans overseas?! When I first arrived in Taiwan, I wrote lots of letters to American senators and representatives to protest the way that the American government doesn’t recognize that Taiwan is an independent country. But not a single congressman every answered a single letter! Instead, they always sent me very short computer-generated letters which said “Sorry, Congressman XXX only has time to read letters from his constituents who reside in his congressional district.”
Then I tried making up fictitious addresses which were in the congressional district of each of the congressmen that I wrote to, but asking them to reply by e-mail. But that didn’t work because all of the congressmen insisted on sending all replies by postal mail (not e-mail) addressed to an address which is in their congressional district. So I still never got a single reply.
So Americans living overseas have no one in Washington representing them, and absentee ballots aren’t usually counted either.