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Important Tax Tips For Expats

Posted by Grand Baymen on Apr 10, 2014 8:37:16 AM
Grand Baymen

Tax issues can be troubling for many people, but When moving abroad, it is vital that people remember to pay due diligence to their tax returns.

Moving out of the U.S. does not absolve people of their tax duties, and all expats in Belize need to remain compliant with IRS rules and regulations. One of the most important things to remember is that a tax return has to be filed each and every year.

The U.S. taxes its citizens on their global income, not just the amount of money they make within American shores. This means that for those earning $400 or more as a self-employed person or meeting minimum IRS thresholds, taxes have to be filed.

One tip that could save people money is to check and identify their residency status. For a lot of people, it will be mandatory to pay tax in both countries. However, once individuals are registered as an official expat, there are ways to mitigate this. To qualify, those living in Belize need to pass the Bona Fide Residence test or the Physical Presence test. For the latter test, expats have to have been outside the U.S. for 330 days in any 365-day period. Meanwhile, for the Bona Fide Residence test, individuals need to have lived abroad for more than a year and have no intention of returning.

There are also a number of credits and deductions available to expats who are living in Belize. Once qualified as an expat, the Foreign Earned Income Exclusion (FEIE) allows people to exclude a maximum of $97,600. For those earning less than this, although a tax form still needs to be filed, no U.S. tax will have to be paid. The Foreign Tax Credit, meanwhile, allows people to reduce the tax paid on any earnings over the FEIE threshold. Finally, Foreign Housing Exclusion is also available, allowing some savings to be made on higher costs of living.

Understanding tax laws, no matter how complicated they may be, is vital for expats. However, by investigating the options, individuals can remain compliant with the system while not having to pay too much.

Topics: Living In Belize

Grand Baymen

Written by Grand Baymen

The Grand Baymen Community includes three distinct but complimentary properties that cater to tourists, expats and Ambergris Caye residents alike. Baymen Garden Condominiums – A private, secure condominium community located on a four-acre parcel of property. Exotic Caye Beach Resort – An established, popular beach resort that caters to tourists and residents alike. San Pedro Fitness Club – Ambergris Caye’s premier club - with pool, tennis courts and gym.