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Moving Outside of the US: Main Tax Considerations | International Tax Lawyer & Attorney

Good morning and welcome to Sherayzen Law Office video blog. My name is Eugene Sherayzen and I am an international tax attorney and owner of Sherayzen Law Office, Ltd.

Today, I am welcoming you from Santa Monica, California. Yesterday, I had a very interesting conversation and that conversation, gave me an idea of a whole series of vlogs about steps you should be taking if you are thinking about moving to live outside of the United States. When you leave the United States, you need to take into consideration three very important topics:

First: the loss of a new host nation; what will be your new compliance requirements?

Second: you need to take steps to end your current state tax residency; for example if you live in California, you are a tax resident of California. So what are the steps you should be taking to end it? It’s very important because you may find yourself in a very strange situation where your state will still tax your worldwide income even though you don’t live in that state.

Finally, and most importantly, you need to understand the US international tax requirements that will apply to you once you move outside of the United States.

These are the topics I will be exploring in the coming days.

Thank you for watching, until the next time.

US Tax Residency & Living Outside the US | International Tax Lawyer & Attorney Santa Monica CA Blog

Hello, and welcome to Sherayzen Law Office video blog. My name is Eugene Sherayzen and I am an international tax attorney and owner of Sherayzen Law Office, Ltd.

Today, I am continuing my series of vlogs from Santa Monica, California. If you recall, in a previous vlog, I raise the issue of US citizens moving to live outside of the United States. It seems like a good topic to pick, while in California. I’ve raised three main issues that should be considered by anyone who’s leaving the United States.

  1. Local tax compliance
  2. Ending state tax residency
  3. US international tax compliance

I addressed the first two issues in previous vlogs and today I’d like to begin addressing the third one. We’ll start with the income tax considerations. When you move outside of the United States, as long as you are a US citizen, you are considered to be a tax resident of the United States no matter to which country you move. Even if you move to North Korea, you still will be a tax resident of the United States.

What does it mean for you? It means that you have the obligation to continue to file US tax returns and to report your worldwide income on the tax returns.

We will continue discussing this topic in more detail in the follow-up vlogs.

Thank you for watching, until the next time.

Knowledge of FBAR Existence & Willfulness | FBAR Lawyer Beverly Hills Los Angeles California

Hello, and welcome to Sherayzen Law Office video blog. My name is Eugene Sherayzen and I am an international tax attorney and owner of Sherayzen Law Office, Ltd.

Today, we are continuing our series of vlogs from Beverly Hills, California and today I’d like to talk to you about FBAR compliance and particular where an obligation to file an FBAR was known to the taxpayer but the taxpayer has not acted on it. Is the taxpayer’s inaction in and of itself sufficient to automatically prove early non-compliance was willful and the answer is no, automatically no. We have to look at all facts and circumstances but is this a negative fact? Absolutely. The passage of time between the time when the taxpayer learned about the existence of FBAR and when he took action is a very important consideration, not only for the reasonable cause purposes, but also for non-willfulness purposes.

If you would like to learn more about FBAR compliance, in particular the issue of willfulness vs. non-willfulness, in the context of FBAR non-compliance, call me at (952) 500-8159 or you can email me at: [email protected]

Thank you very much and until the next time.

Worldwide Income Reporting while living outside the US | International Tax Lawyer

Hello, and welcome to Sherayzen Law Office video blog. My name is Eugene Sherayzen and I am an international tax attorney and owner of Sherayzen Law Office, Ltd.

We are continuing a series of blogs from Santa Monica, California. Today, I’m standing on the beach in front of the Pacific ocean and I’d like to talk to you about a topic I raised last time. Where I said if you decide to move outside of the United States, you continue to be a tax resident of the United States and you have to report your worldwide income on your US tax returns.

Today, I’d like to answer a few questions that often arise in the context of that statement. First of all: Does the worldwide income requirement mean that all of your income have to be disclosed or only elective income or passive income? The answer to that question is ALL income has to be disclosed; all foreign and domestic. It doesn’t matter if it’s subject to local taxation. It doesn’t matter whether it’s non-taxable in the local country. Here, you have to operate as a US tax resident by US tax rules, so all of your worldwide income is reportable on your US tax returns.

Does that mean that you won’t be able to take advantage of the fact that you are taxed locally? Does it mean that you will be suject to double taxation? Not necessarily. The United States has plenty of tax treaties around the world with many countries, the vast majority of countries and you should be able to take a foreign tax credit to minimize your US tax liability, though it may not be dollar for dollar, there may be complications which is an issue to be discussed in the context of specific facts but you’re likely not to be subject to full double taxation. There should be a way for you to plan out your tax affairs and a way to minimize your US tax exposure. We’ll continue exploring this subject of US international tax reporting requirements in the following blogs.

Thank you for watching, until the next time.

Ending State Tax Residency – Moving outside of the US | International Tax Lawyer Santa Monica

Good morning and welcome to Sherayzen Law Office video blog! My name is Eugene Sherayzen; I am an international tax attorney and owner of Sherayzen Law Office, Ltd.

Today, I am continuing a series of blogs from Santa Monica, California. In previous blogs, I raised the issue of US citizens moving to live outside of the United States and I’ve addressed the first problem of local tax compliance. Today, I’d like to talk to you about the second problem; that is the ending of state tax residency. Let me be clear about what I mean here; what I mean is ending local state tax residency, obviously not federal tax residency. Regarding federal tax residency, you will have as long as you are a US citizen.

For example, the state of California has its own state tax residency rules and while they consider you a tax resident, they will tax you on your worldwide income. This is similar situation with respect to states like Minnesota, New York, New Jersey – basically all of the states that have income tax and even those who don’t also have their own state tax residency rules.

Why is that important? Why do you need to end your state tax residency or at least consider doing so before you leave the United States? For a very simple reason: If you don’t, then the state will continue to tax you on your worldwide income even though, technically, you live outside of the United States.

I can give you an example from my Minnesota practice. A client of mine left for the Middle East and thought he ended his Minnesota tax residency; he lived there for four years and then all of a sudden, the state of Minnesota contacted him and argued that he should be paying Minnesota taxes on his worldwide income for all of these four years. The local accountants, unfortunately didn’t do a good job; in the interview, they misguided him and he came to me and we took care of this problem. The problem is that there is always a cost in neglecting these types of issues. You need to make sure that you do everything that is required to end your state residency before you leave the United States. For example, if you are required to give notice to your local county, then absolutely do so. If you are required to put your house up for sale, then absolutely do so. If you are required to move your banking outside of the state, then do so. State tax residency rules can be very complex, so it’s important that you explore this issue ahead of time and then take care of it before you leave.

Thank you for watching, until the next time.