[ Offshore Tax ] Can a Caribbean Passport Save Me Money on US Taxes?
Yes, the United States is one of a few countries that taxes its citizens on their worldwide income, regardless of where they live. This means that if you are a US citizen or resident alien, you must report and pay taxes on all of your income, including income from foreign sources. Having a second passport does not relieve a US taxpayer of their responsibilities.
There are a few exceptions to this rule. For example, if you are a US citizen living and working abroad, you may be eligible for the foreign earned income exclusion (FEIE), which allows you to exclude a certain amount of your foreign income from taxation. You may also be eligible for the foreign tax credit, which allows you to reduce your US tax bill by the amount of foreign income taxes that you have paid.
However, even if you qualify for the FEIE or the foreign tax credit, you are still required to report all of your foreign income on your US tax return.
There are a few reasons why the United States taxes its citizens on worldwide income. One reason is to prevent tax avoidance. If US citizens were not taxed on their foreign income, they could easily avoid paying taxes by moving their assets and income to offshore jurisdictions.
Another reason is to maintain equity. If US citizens were not taxed on their foreign income, they would have an unfair advantage over US residents who do not have foreign income.
Finally, the United States relies on the tax revenue from its citizens’ foreign income to fund its government programs and services.
If you are a US citizen living and working abroad, it is important to consult with a qualified tax advisor to ensure that you are complying with all of your US tax obligations.
TIMESTAMPS:
0:00 INTRO
0:55 Citizenship by Investment in the Caribbean
1:28 Saving money when having a Caribbean passport
2:20 Foreign income inclusion for US ex-pats
2:42 OUTRO
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