US expats’ taxes on investments and income require specialist knowledge
US expats must declare their taxes annually to the Internal Revenue Service (IRS) and are subject to US tax on their global assets no matter where in the world they reside.
The United States is one of only two countries in the world that taxes its non-resident citizens on their worldwide income. The other country is Eritrea, in eastern Africa. (Globalizationguide.org).
The tax rates for non-resident citizens in the United States are the same as for resident citizens, with a progressive tax system that ranges from 10% to 37% depending on income level. However, non-resident citizens may be eligible for certain exclusions and deductions that can reduce their tax liability.
Legal reporting requirements
Under the Foreign Account Tax Compliance Act (FATCA), certain U.S. taxpayers holding financial assets outside the United States must report those assets to the IRS. There are serious penalties for not reporting these financial assets.
Under the law known as the Bank Secrecy Act, US citizens must report certain foreign financial accounts, such as bank accounts, brokerage accounts and mutual funds, to the Treasury Department and keep certain records of those accounts. This involves filing a Report of Foreign Bank and Financial Accounts (FBAR).
Ultimately, the IRS will learn of expats’ accounts, as all financial institutions are now obliged to disclose the presence of all US-connected clients.
US expat financial management requires a specialist
With the specific taxation rules American expats face, their investments – and the gains, dividends, interest, distributions, etc. – must all be taken into consideration in regard to taxation.
Specific, professional advice for portfolio construction and management is essential for US residents living abroad.
Less than a handful of companies have the appropriate SEC authorizations to manage US-connected clients. Aisa International, based in Prague, Czech Republic, is registered with the SEC and partners with LGT and Evelyn Partners, two top tier wealth management firms, to provide the specialized US services American expats need.
Cover all your bases
Aisa Group, LGT and Evelyn Partners US Service have many years of experience.
The investment advice, US tax advice, and – notably – all of the legal tax reporting to the US IRS is part of the service.
Evelyn Partners is a founding member of the international accounting network CLA Global, so can offer clients a truly international service. Tax advice is taken very seriously, as they are criminally responsible if a client fails to pay US tax based upon their advice.
Next steps
You are encouraged to schedule a free initial consultation with Aisa International to discuss your financial concerns as a US expat. Should you need the US services and tax reporting offered by our partners, LGT and Evelyn Partners, we will be happy to make that introduction and add their services to the investment portfolio management you need.
