Professional US Tax Services in Hong Kong Resolves ‘Tax’ Concerns for Americans Living Abroad

There was a time in the past when Americans went abroad to find a job, study, marry or retire- with full freedom and no stress of any legal burden. But the situation is very different today which required them to get the assistance of professional US tax services in Hong Kong. Americans who live overseas in present times are experiencing that they are subject to several obligations imposed by their own country, including the requirement to file tax returns every year otherwise bear the stiff penalties on the failure of taxes they may owe.

The United States is the only developed nation that requires its citizens who are living abroad pay taxes on their ‘worldwide’ earned income. Also, the US Internal Revenue Service (IRS) is becoming increasingly strict about enforcing regulations on US citizens living outside the territory. This article will explore in brief of the US tax Honk Kong issues concerning US citizens. Regarding the US tax regulations, many confusion spread around which needs to be sorted out with professional assistance.

When discussing the US tax provision, you must know who a US person is. According to the IRS released tax guidelines, a “US person” involves American citizens as well as resident alien” with permanent green card holders and all those who are currently classified as US residents by voluntary election.

If you belong to any of the above-mentioned US Person categories then you will be taxed, no matter where you reside. You will be directly taxed on your worldwide income.

However, a US person can also treat a non-resident alien (NRA) spouse as a US resident to file the joint income tax return and save taxes. For this, the NRA spouse needs to obtain a social security number or taxpayer-identification number (TIN). Also, in some cases, filing taxes separately prove more efficient and fruitful to US persons. For a better understanding of tax events, it is highly suggested to have an experienced tax specialist for American tax consulting Hong Kong, calculate the various options after accessing the situation from different angles and guide you with the ideal solution.

Double Taxation Concerns

This is one of the biggest concerns which many US persons are facing for working outside the US. Double taxation is a result of mismatches in tax calendars between the United States and other countries. For instance, the US calendar follows the taxation year from 1st January to 31st December whereas; the Hong Kong calendar follows 1st April to 31st March as a taxation year. It is due to the calendar year difference which creates double taxation issues among US persons.

The best way to avoid double taxation concern is through

• Tax treaties and agreements

• Foreign tax credits

• Foreign earned income exclusion

• Foreign housing exclusion

• Employer-provided meals exclusion

And many more provisions are found valuable to reduce or eliminate tax liabilities. It is only the expertise of a tax specialist that lets you aware of tax exemption policies while keeping your returns compliant with the IRS regulations.