Has DNI, Working Abroad for US$, Bank and Tax Issues?

[GS_Dirtboy]

I have a friend who lives in Argentina permanently. He is a US expat with a DNI who works abroad. He flies in and out 2x per month to the US and he gets paid directly into his US account.

He's asking about tax reporting requirements here as well as any issues he might have either withdrawing his Dollars here or coming back with cash in his pocket and making deposits into his Argentine account.

I thought I'd post this to the forum to get a more informed (than my) opinion.

Thanks in advance.

GS

 

[Iznogud]

Must look into Double Taxation agreements between the US and Argentonia as a starting point, then seek to conform to the regulations from the country where he will be filling his taxes.

 

[steveinbsas]

He will have to file tax reports in both the US and Argentina. If he is being paid in the USA he may not qualify for the US tax exemption on income earned abroad. If his employer is not paying half his FICA (social security tax) he will need to pay it all (if he is working on contract as a self employed individual) and he will also need to pay the medicare tax.

As a permanent resident of Argentina, all of the income paid to him in the US is also subject to taxation in Argentina. Argentina does not have a tax treaty with the USA.

There is more detailed information here (including tax tables for Argentina):

http://www.greenbacktaxservices.com...ed-filing-taxes-as-american-living-argentina/

The only way he can withdraw dollars in Argentina is to first deposit dollars into a dollar bank account in Argentina. He should be sure to report all of the dollars he deposits as income when he makes his annual declaration.

 

[GS_Dirtboy]

Ok, does that mean that he will pay twice on his taxes? Once in the US and again here in Argentina? As opposed to paying taxes on money earned in Argentina and getting a credit for that for US taxes?

 

[steveinbsas]

It might. If he is working for a company that is registered in the USA and being paid in the USA he may not qualify for the foreign earned income exemption...but I am not certain. If he is being paid "dividends" or any form of passive income the exemption does not apply.

If he is not paying into a foreign retirement program he will have to pay the social security and medicare taxes in the US even if he qualifies for the US tax exemption.

 

[citygirl]

It might. If he is working for a company that is registered in the USA and being paid in the USA he may not qualify for the foreign earned income exemption...but I am not certain.

He very may well, even if he is working for a US company, paid in US dollars and paid into a US bank account. Depends on the nature of his work. He should talk to an accountant

Why on earth would he want to deposit money into his Argentine bank account? Easiest is just to come back into Argentina with dollars whenever he needs them (certainly not a problem if he is flying into the US multiple times) and convert them to pesos as needed. I would NEVER recommend anyone keeping more than just spending money in the banks here or converting large amounts to pesos at once - you're losing value immediately.

 

[el_expatriado]

The proper way to do things: He files income tax and bienes personales tax in Argentina, his tax home, and then takes a tax credit in the USA on the amount he paid to the tax authorities here. He'll be paying 35% income tax in Argentina based on his USA income, with almost no deductions (no such thing as 401K, etc).

The cheap way to do things: Sign up for monotributo in Argentina as an independent worker and just make a few facturas here and there so he can justify an income here for his expenses. If he buys property here he should submit bienes personales on his Argentine property each year. If he thinks he might buy property in the future, start paying bienes personales today on dollars he has "stored" in his safety deposit box. Then when he buys property in the future he just reduces his "caja" by the amount of the purchase he made.

 

[GS_Dirtboy]

What if he is a per diem employee of a US company, lives in Argentina full-time, and performs all of his work outside of Argentina - mostly in the US and Canada?

He didn't want his employer to deposit his money into his account here. He would do what City Girl says and just bring funds back as he needs them.