USA

The US uses a progressive tax system, where tax rates increase with higher income levels. As an expat, you are required to report your worldwide income, including income earned abroad, to the Internal Revenue Service (IRS). However, you may be eligible for foreign earned income exclusions or tax credits to reduce your US tax liability. In addition to federal income tax, you may also be subject to state income tax, depending on your state of residence. State tax rates and regulations vary widely. Some states, such as Florida and Texas, have no state income tax, making them popular choices for expats.

Your capital gains tax liability depends on how long you have held the asset for. Assets held for one year or less are considered short-term, while those held for more than one year are categorized as long-term. If you have held the asset for a longer period, capital gains generally receive more favourable tax treatment. There are exemptions and exclusions available that may reduce your capital gains tax liability as an expat.

US expats are generally required to pay Social Security and Medicare taxes if they are employed in the USA, just like US citizens. These taxes fund retirement and healthcare programs. However, if you are covered by a Totalization Agreement with your home country you may be exempt from these taxes.

It’s important for you to know that some states impose sales tax on various goods and services. The rates and rules for sales tax vary by state. When making purchases, it’s essential to be aware of the applicable sales tax in your state of residence.

The US has estate and gift taxes that may apply to expatriates with substantial assets in the country. Estate taxes are imposed on the transfer of your assets after your passing, while gift taxes apply to substantial gifts made during your lifetime. There are exemptions and thresholds that can affect your tax liability.

If you own real estate in the USA, you are subject to property taxes. Property tax rates and assessments are determined by local governments. 

Navigating the complex US tax system as an expat can be challenging, but with proper planning and guidance, you can optimize your tax situation. Seeking assistance from tax professionals who specialize in expatriate tax matters is highly recommended. They can help you take advantage of available tax benefits and ensure compliance with US tax laws, allowing you to make the most of your expat experience in the USA.

Your financial future as an expat in the USA is a critical aspect of your journey, and understanding the complexities of the American pension system is essential. In the USA, you have access to a range of pension options, each designed to secure your financial well-being during your retirement years.

At Advice for Expats, our network of experts is here to offer comprehensive insights into each pension choice, empowering you to make well-informed decisions that fully align with your long-term financial goals.

As an expatriate living in the United States, it’s essential to understand the implications of inheritance tax to safeguard your family’s financial future. In the USA, inheritance tax, also known as estate tax, is a federal tax applied to the transfer of assets upon an individual’s death. This tax can significantly impact the wealth you pass on to your heirs, making careful planning essential.

At Advice for Expats, we specialize in helping expatriates navigate the complexities of inheritance tax in the USA. Our team of experts understands the unique challenges you face as an expat and we provide tailored guidance to protect your family’s financial future while ensuring compliance with all relevant tax laws. Don’t leave your family’s financial security to chance.