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US Expat Tax Planning and Compliance

   

Added on  2019-10-18

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1.Super annauation FundSuperannuation fund is a type of savings fund in which company deposits certain amount of its employees. It will not be taxable until and unless, employee withdraws the amount from the fund. Thus, it will also not be taxable in the hands of client.Superannuation is not qualifying income for the Foreign Earned Income Exclusion so youwill not be eligible to use the exclusion for superannuation income. You can instead use Foreign Tax Credits to offset the US taxes on this income.Passive Foreign Investment Company (PFIC) investments held within an employee benefits trust do not need to be reported separately on Form 8621 on an annual basis.The contributions or growth taxed on the US expatriate tax return becomes your US basis in the fund. At distribution, this basis is not taxable on the US return.2.Car ExpensesClient owned car, which he was saying that 75% is used for business purposes. However, as per IRS (Internal Revenue Services), a person cannot claim any car expenses as deduction whether he is maintaining records or not.You must keep mileage records for any business travel you do. In fact, the IRS specifically asks you on your tax return whether you have written evidence of your auto expenses and is likely to deny your deduction if you don't have them.At a minimum, you should keep a notebook in the car and jot down your odometer reading at the beginning and end of the year. In between, you should jot down your starting and stopping odometer reading for each business trip you take, as well as the reason for the trip.
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