“United States citizens living abroad are required to file annual U.S. income tax returns and report their worldwide income if they meet the minimum filing requirements for their filing status and age.”
“All U.S. citizens and resident aliens, depending on the amount of the foreign source income, are subject to U.S. tax on their worldwide income. If you paid taxes to a foreign government on income from sources outside the United States, you may receive a foreign tax credit against your U.S. income tax liability for the foreign taxes paid.”
However, “If you are a United States citizen or a resident alien who lives and works abroad, you may qualify to exclude all or part of your foreign earnings from your income. For specific information, refer to Tax Topic 853, Foreign Earned Income Exclusion - General.”
I know you’re new here, and I don’t mean to be hard on you, but we are on this board to combat ignorance, not spread it. Rich Dad, Poor Dad is total utter bunk, cow flop, nonsense, tripe, whatever you want to call it. See: http://www.johntreed.com/Kiyosaki.html
Your last statement implies that, if I’ve ever earned money working in the U.S., I can’t ever go to live somewhere else. When I said “emigrate,” I was referring to moving to another country, giving up U.S. citizenship, and becoming a citizen of your new, adopted homeland. If that won’t get you out of paying taxes to the U.S. IRS, I don’t know what will (short of dying, of course!).
Youre right I was being silly. I apalogize for accusing you of yelling at me. Hey, wait, I didnt specify WHO should stop yelling at me.
So you were yelling at me. Damnit to hell, now I`m really mad. Oh, wait, you apalogized already. Nevermind.
They dont get out of it if they are millionaires because of their salary. If they are millionaires because of other reasons, investments, inheritance, stocks, owners of business, etc., then its different. Not all millionaires make millions. I`d wager very few millionaires show very high incomes.
{b]DCU**, thank you for the link the Tax Protester’s FAQ. Wonderful, fascinating page. I printed it out and read it all the way through. What an uplifting view of the intelligence of our fellow American citizens.
And, BTW, it thoroughly demolishes the notion of some posters here that paying income taxes is in any way shape or form voluntary.
Some what different yes. But not enough that they avoid paying taxes. I would wager that most millionaires do show high income. I am not sure how either of us could prove it to the other though.
whuckfistle, you seem to assume that only salary counts as “income” for the purposes of income tax. That’s not my understanding, based on U.S. Code: Title 26: Section 61, which reads:
It is true that there is no absolute, printed law that states it is mandatory for US citizens (as that term is commonly understood) to pay any income tax. If you read your 1040 booklet each year, it states the tax is voluntary, not based on distraint, and nowhere will you find the word “mandatory” relating to your paying of the tax. It is true that not one single person understands the tax code. It is also true that if you write to the IRS and ask them to send you a copy of the law that states you must pay the tax, or the law that gives them jurisdiction to operate outside the District of Columbia, they will reply in writing that there is none. And it is also true that most of us work through April and into May just to pay the income tax each year, that it started out as a maximum of just 1% of the income of only those who worked for the government and in the courts, and that it has been slowly ratcheted up under color of law to the point where the average person really believes tax cuts are a bad thing and that the government needs a fourth to a third of their income to operate.
However, it is also true that if you try not to pay it, they make your life even more of a living hell than it is to pay the usurious tax. They will take your homestead, your possessions, your freedoms, everything America was supposed to stand for, away from you. So far I know of very, very few people who have successfully “nined out” their social security number (999-99-9999), been refunded their last three years of income and social securtiy taxes, and been left alone permanently. If you leave one t uncrossed or one i undotted, they nail you with a zesty gusto unmatched by any Gestapo goose-stepper. So it’s not worth it for most people to bother.
A much more sensible alternative was presented to Congress as H.R.2001 by five courageous congressmen who had the nerve to literally throw the 15,000±page tax code into Boston Harbor and suggest instead a consumption (sales) tax, paid at the cash register whenever you buy non-essential stuff. Ten or 15 percent would be more than enough if everyone, including ultra-rich guys with crafty accountants and underworld types who never pay income tax, would then have to shoulder their fair share of the tax burden. No forms to fill out, no billions of dollars and hours wasted every year on paying the IRS, and no IRS. Special-interest groups, of course, killed the legislation quickly.
I just look at the income tax as repulsive, illegal, disgusting, repugnant, and the worst system in the entire world–except for all the others. It’s the “fee” I pay to be left alone to pursue my happiness in a basically free country.
Exactly. Most millionaires get to a net worth of over a million by accumulating assets. You don’t need a massive salary to do that.
Let’s say someone earns $60k and buys a house of value $180k on a 100% mortgage. He invests $500/month in the stock market and never sells to create capital gains tax liability. Let us say that the stock market investment returns a typical 7% over inflation, and the house appreciates at 3% over inflation, then by the time the 30 year mortgage is paid off, the owner will have a net worth of over $1m in today’s dollars. And will only be paying tax on that $60k income, which will not be much. Of course, more tax will be due when he starts selling his stocks.
Hence a millionaire can pay very little in the way of taxes.
The mixing up of wealth (what you have) with earnings (what you make) is a common mistake. Hence the cry of Bush giving tax brakes to the rich. That is not strictly true - he gives them to the people who earn a lot (and therefore pay a lot of tax).
I’m not wanting to turn this into a political debate, just to point out the difference between earning a lot and owning a lot. Millionaires do the latter. Of course, earning a lot makes it a whole lot easier to get there!
Well, except that it is completely, totally factually incorrect. USC Title 26 lays out the statutory authority for the IRS to assess and collect the income tax, and section 6601 of that code lays out the legal duty to make a filing of income for purposes of determining the tax.
i think that the tax avoidance books are all correct. however, none of the judges who send tax protesters to prison will agree, in writing or verbally, with me.
I just didn’t understand what you were trying to say.