A Tax Accountant Can Maximize Expat Tax Savings

One of many big draws for the growing quantity of Americans moving abroad is tax savings - up to $10,000 or even more per year - mainly because of the foreign earned income exclusion, allowing US expats up to $91,500 in earnings that's not subject to federal income tax.

For self-employed expats, however, their entire net income, including the excluded portion, is still subject to the federal self-employment tax (13.3% for 2011), unless they've a tax accountant savvy enough to advise them on legal ways in order to avoid it.

A tax accountant experienced in expat issues would explain there are two ways for self-employed Americans overseas to steer clear of the self-employment tax, which dịch vụ kế toán funds Social Security and Medicare. One of the ways is to reside in a nation with a totalization agreement with the United States (also called a tax treaty), allowing a US taxpayer abroad to opt out from the US Social Security system by paying to the social insurance system in their country of residence. An experienced international tax accountant can guide an expat through this technique with relative ease.

In the lack of a tax treaty, a tax accountant with broad international knowledge can assist a self-employed US expat in setting up a legal entity in the country where they live. By channeling income through this legal entity, such as a small corporation, the self-employed taxpayer is not subject to US self-employment tax but would still qualify for the foreign earned income exclusion.

A tax accountant with international experience will help an expat develop an overall tax strategy that takes advantage of each benefit within the complex tax code provisions that apply to overseas residents. With out a competent international tax accountant, an expat taxpayer runs the danger of misinterpreting one of these brilliant complicated regulations and possibly adding 1000s of dollars to their tax bill.

Getting a US tax accountant with extensive knowledge and experience in expat tax preparation is much easier for Americans living abroad than it used to be, as a result of the Internet. One firm is Tax Planner CPA, whose website allows readers of the site's informative blog entries and articles to ask specific tax-related questions and keep these things answered by a Tax Accountant specializing in expat tax issues.