Us Expat Working Remotely For Us Company - Tax Help

[citygirl]

Find an account as suggested. Physical presence is indeed possible but you need to make sure you have all the steps. And as explained, you are exempt from the income tax but still responsible for medicare/social security.

 

[Girino]

Thanks everyone for all of the input. I would not be physically present in the US for more than 30 days per year, so I feel that I would meet the requirements to claim the Foreign Earned Income Tax credit. It appears my best option would not be to try and live in Argentina for 5 years on a tourist visa, even though I could probably avoid paying Argentine income tax, but possibly stiff have to pay US income tax regardless of claiming the foreign earned income tax credit or not.

I don't think your plan is doable if you do not plan on ever becoming a resident of Argentina.
You can meet the requirements to be a bona fide resident of another country, but you have to be a resident of the other country, not a mere tourist.
This was not made to elude taxes by being a forever tourist globetrotting around the world. It was made for people actually residing abroad.

Otherwise, claim you are a resident of whatever place... Uruguay? Monaco? Ireland? UAE? Why stuck with Argentina...
If the IRS ask you for residency proof in Argentina what are you gonna show them? Your AirBnB receipt?

 

[steveinbsas]

• A U.S. citizen or a U.S. resident alien who is physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months.

Sounds like to meet that requirement you need only be outside the country for more than 330 full days. NO where does this phrase say anything about your residency status abroad or even if you need to be in one place for XX days...as long as you are outside the US for the minimum of 330 days in a "foreign country or COUNTRIES" you meet that requirement. I don't know where all this residency stuff is coming into play from everyone else's comments...

According to the IRS website, to qualify for the foreign earned income exemption you have to have foreign earned income and your tax home must be in a foreign country. It does not say anything about "residency" but the key exp<b></b>ressions are "foreign earned income" and "tax home."

Does a US citizen who is living abroad more than 330 days of the year but is working for a US business and is being paid in the USA have foreign earned income and does that make the income exempt from taxation in the USA?

If it does I think there would be thousands more US citizens living abroad, spending just under six months in a country like Argentina and the same amount of time in another (provided their "foreign" income would not be taxed there, either).

Thanks everyone for all of the input. I would not be physically present in the US for more than 30 days per year, so I feel that I would meet the requirements to claim the Foreign Earned Income Tax credit. It appears my best option would not be to try and live in Argentina for 5 years on a tourist visa, even though I could probably avoid paying Argentine income tax, but possibly stiff have to pay US income tax regardless of claiming the foreign earned income tax credit or not.

Again, in order to qualify for the foreign earned income tax exemption you have to have foreign income. As I asked above, how can your US income be considered "foreign income" by the IRS?

If I became an Argentine resident, then I understand that I would have to pay taxes to the Argentine government on my US earned income, and be able to avoid paying tax on my US earned income..... but would I have to supply them with copies of my US tax return, or some sort of income statement, or how do they (and myself) know how much I would owe them since taxes would not be directly deducted from my employer?

What makes you believe (or understand) that by becoming an Argentine resident you would be exempt from paying taxes in the US on your US earned income? For your employer to legally pay you in Argentina they would have to be registered as a business in Argentina and have permission to hire foreigners. Then you would be eligible for the foreign earned income tax exemption. You would also need to have temporary residency (based on the job) in Argentina in order to satisfy Argentine migraciones and AFIP.

I would LOVE to be wrong about this but if you are a US citizen, who is "living outside" the USA for more than 330 days a year, you are not exempt from paying taxes on your US earned income, Your resident status or physical presence in another country doesn't make any difference. A salary paid to a US citizen by a company in the USA is not considered foreign income by the IRS.

You cannot qualify for temporary residency based on the active US income that is being deposited into your US bank account, but you indicated you are eligible for a religious visa. They are issued for 30 days or one year. The 90 day tourist visa (which can be extended for 90 days) would undoubtedly a better choice than a 30 day religious visa...and you wouldn't have to pretend (lie to migraciones) that you are in Argentina for religious reasons...unless you are a member of the Church of the Seventh Day Opportunists.

There is detailed information about the religious visa here: http://ctoro.mrecic.gob.ar/en/node/812

It appears that an entry permit can be granted by the Ministry of Foreign Affairs (thus bypassing migraciones?) but this may only apply to transitory visas (good for 30 days). For a stay of one year it may be necessary to apply for temporary residency which would be granted migraciones.

This is from the web page (I did not omit number four. It isn't there.):

3. This procedure do(es) not exempt from completing any of the other requirements established by the current immigration rules by the type of residence requested.

5. If the foreign visa applicant is expecting the process of an entry permit issued by the National Directorate of Migration, the procedure specified in paragraphs 1 and 2 shall not apply.

The two remaining unanswered questions are:

1. Is there an income requirement for a one year religious visa (temporary residency)?

2. If there is, can you use your active (earned) US income to qualify for the visa?

 

[steveinbsas]

This was not made to elude taxes by being a forever tourist globetrotting around the world. It was made for people actually residing abroad.

And actually earning income and being paid in a foreign country.

 

[Jaredberryman]

According to the IRS website, to qualify for the foreign earned income exemption you have to have foreign earned income and your tax home must be in a foreign country. It does not say anything about "residency" but the key exp<b></b>ressions are "foreign earned income" and "tax home."

Does a US citizen who is living abroad more than 330 days of the year but is working for a US business and is being paid in the USA have foreign earned income and does that make the income exempt from taxation in the USA?

If it does I think there would be thousands more US citizens living abroad, spending just under six months in a country like Argentina and the same amount of time in another (provided their "foreign" income would not be taxed there, either).




Again, in order to qualify for the foreign earned income tax exemption you have to have foreign income. As I asked above, how can your US income be considered "foreign income" by the IRS?




What makes you believe (or understand) that by becoming an Argentine resident you would be exempt from paying taxes in the US on your US earned income? For your employer to legally pay you in Argentina they would have to be registered as a business in Argentina and have permission to hire foreigners. Then you would be eligible for the foreign earned income tax exemption. You would also need to have temporary residency (based on the job) in Argentina in order to satisfy Argentine migraciones and AFIP.

I would LOVE to be wrong about this but if you are a US citizen, who is "living outside" the USA for more than 330 days a year, you are not exempt from paying taxes on your US earned income, Your resident status or physical presence in another country doesn't make any difference. A salary paid to a US citizen by a company in the USA is not considered foreign income by the IRS.

You cannot qualify for temporary residency based on the active US income that is being deposited into your US bank account, but you indicated you are eligible for a religious visa. They are issued for 30 days or one year. The 90 day tourist visa (which can be extended for 90 days) would undoubtedly a better choice than a 30 day religious visa...and you wouldn't have to pretend (lie to migraciones) that you are in Argentina for religious reasons...unless you are a member of the Church of Seventh Day Opportunists.

There is detailed information about the religious visa here: http://ctoro.mrecic.gob.ar/en/node/812

It appears that an entry permit can be granted by the Ministry of Foreign Affairs (thus bypassing migraciones?) but this may only apply to transitory visas (good for 30 days). For a stay of one year it may be necessary to apply for temporary residency which would be granted migraciones.


This is from the web page (I did not omit number four. It isn't there.):


3. This procedure do(es) not exempt from completing any of the other requirements established by the current immigration rules by the type of residence requested.



5. If the foreign visa applicant is expecting the process of an entry permit issued by the National Directorate of Migration, the procedure specified in paragraphs 1 and 2 shall not apply.


The two unanswered questions are:

1. Is there an income requirement for a one year religious visa (temporary residency)?

2. If there is, can you use your active (earned) US income to qualify for the visa?

Steve according to my accountant, I qualify for the bona fide residence even though I have a U.S. LLC and receive income from it in my U.S bank account. However, I am a permanent resident and also pay some taxes here. So I do not think that just because payment comes to you in your U.S. account, that it is not foreign earned income. I believe foreign earned income means that you live in a foreign country and earn income. So, in order to be eligible for the income tax exemption, you should be able to prove to the IRS that you are a resident of a foreign country, and you pay taxes there. That is apparently all that you need. This is according to multiple accountants that specialize in this area. Still have to pay social security though, just liked everyone mentioned.

In order to figure out what you would have to pay here, you would need to consult with an Argentine accountant for sure. It can likely be monotributo or just income tax. Still probably cheaper than the U.S.

 

[domthegreat]

According to the IRS website, to qualify for the foreign earned income exemption you have to have foreign earned income and your tax home must be in a foreign country. It does not say anything about "residency" but the key exp<b></b>ressions are "foreign earned income" and "tax home."

Does a US citizen who is living abroad more than 330 days of the year but is working for a US business and is being paid in the USA have foreign earned income and does that make the income exempt from taxation in the USA?

If it does I think there would be thousands more US citizens living abroad, spending just under six months in a country like Argentina and the same amount of time in another (provided their "foreign" income would not be taxed there, either).




Again, in order to qualify for the foreign earned income tax exemption you have to have foreign income. As I asked above, how can your US income be considered "foreign income" by the IRS?




What makes you believe (or understand) that by becoming an Argentine resident you would be exempt from paying taxes in the US on your US earned income? For your employer to legally pay you in Argentina they would have to be registered as a business in Argentina and have permission to hire foreigners. Then you would be eligible for the foreign earned income tax exemption. You would also need to have temporary residency (based on the job) in Argentina in order to satisfy Argentine migraciones and AFIP.

I would LOVE to be wrong about this but if you are a US citizen, who is "living outside" the USA for more than 330 days a year, you are not exempt from paying taxes on your US earned income, Your resident status or physical presence in another country doesn't make any difference. A salary paid to a US citizen by a company in the USA is not considered foreign income by the IRS.

You cannot qualify for temporary residency based on the active US income that is being deposited into your US bank account, but you indicated you are eligible for a religious visa. They are issued for 30 days or one year. The 90 day tourist visa (which can be extended for 90 days) would undoubtedly a better choice than a 30 day religious visa...and you wouldn't have to pretend (lie to migraciones) that you are in Argentina for religious reasons...unless you are a member of the Church of the Seventh Day Opportunists.

There is detailed information about the religious visa here: http://ctoro.mrecic.gob.ar/en/node/812

It appears that an entry permit can be granted by the Ministry of Foreign Affairs (thus bypassing migraciones?) but this may only apply to transitory visas (good for 30 days). For a stay of one year it may be necessary to apply for temporary residency which would be granted migraciones.

This is from the web page (I did not omit number four. It isn't there.):

3. This procedure do(es) not exempt from completing any of the other requirements established by the current immigration rules by the type of residence requested.

5. If the foreign visa applicant is expecting the process of an entry permit issued by the National Directorate of Migration, the procedure specified in paragraphs 1 and 2 shall not apply.

The two remaining unanswered questions are:

1. Is there an income requirement for a one year religious visa (temporary residency)?

2. If there is, can you use your active (earned) US income to qualify for the visa?

Per several accountants I have talked this is exactly the case. Being outside is the key...where you do the work is key...no mention of foreign residency anywhere. I don't think they are too worried about people flying abroad for the entire year to take advantage of this deduction...its only good up to 110k +/- so its not like the super rich are jumping through this loophole to get out of taxes.

If you read the booklets from the IRS on the subject the question of tax home and such come up but only in the first two cases...in the third option of being outside 330 days + it merely makes reference to where you work is being performed and your physical presence.

 

[steveinbsas]

Steve according to my accountant, I qualify for the bona fide residence even though I have a U.S. LLC and receive income from it in my U.S bank account. However, I am a permanent resident and also pay some taxes here. So I do not think that just because payment comes to you in your U.S. account, that it is not foreign earned income. I believe foreign earned income means that you live in a foreign country and earn income. So, in order to be eligible for the income tax exemption, you should be able to prove to the IRS that you are a resident of a foreign country, and you pay taxes there. That is apparently all that you need. This is according to multiple accountants that specialize in this area. Still have to pay social security though, just liked everyone mentioned.

In order to figure out what you would have to pay here, you would need to consult with an Argentine accountant for sure. It can likely be monotributo or just income tax. Still probably cheaper than the U.S.

Thanks, Tex. That's the kind of info I was hoping to see here.

While you were writing I was digging a little deeper and found this (my italics):

Source of Earned Income

The source of your earned income is the place where you perform the services for which you received the income. Foreign earned income is income you receive for performing personal services in a foreign country. Where or how you are paid has no effect on the source of the income. For example, income you receive for work done in France is income from a foreign source even if the income is paid directly to your bank account in the United States and your employer is located in New York City.

The source is the IRS.gov website: https://www.irs.gov/...n-earned-income

PS: Thanks also to domthegreat!

Now I wonder why more US citizens aren't doing this.

 

[steveinbsas]

I would want to travel to the US and return to Argentina once, possibly twice per year. I understand that a tourist visa is only good for 90 days, and can be renewed by leaving and re-entering the country. I could do this every now and then, but I don't want a passport full of stamps every 90 days. I also understand that there is a fine that can be paid upon leaving the country as a penalty for overstaying a visa. I would rather pay this fine once or twice a year when I leave the country..... but is it possible to reenter the country after having paid the fee? If it is possible... is it possible to keep this ongoing for 5 years?

Now that the question about US taxation of "foreign earned income" has been answered, I think this one deserves some attention, too.

There haven't been many (if any) posts recently about reentering after an overstay or multiple overstays. The overstay fee was recently increased but I don't remember exactly what the new amount is ($1200 pesos?). I wouldn't "count on" overstaying the tourist visa for five years (even if only once a year). That being said, a severe crackdown on "pseudo-tourists" has yet to materialize.

Going to Uruguay on a visa run does not keep you "legit" with migraciones, but there are probably some expats who are still making the trips.

One thing to consider if you are "working" without temporary residency in Argentina is whether or not you are working in a location that is likely to be visited by AFIP. If you are working out of an apartment and/or dealing with your clients in private or on line you may be able to stay under the radar, but if you are working in an office you will have a higher level of exposure and so will your employer.

If you are caught working without residency you could be detained until you are deported. If you are "lucky" you would be taken to EZE and detained there until departure. I'm not sure you would be allowed to return to your apartment to pack your bags first.

Bajo_cero2 (aka Dr. Christain Rubilar) hasn't been posting recently, but you can search his posts (find content) to read what he has said about the subject.

 

[Jed]

Otherwise, claim you are a resident of whatever place... Uruguay? Monaco? Ireland? UAE? Why stuck with Argentina...
If the IRS ask you for residency proof in Argentina what are you gonna show them? Your AirBnB receipt?

Passport will show your exit and entry dates.

 

[Pensador]

And another thing there is information sharing now and AFIB is not as corrupt as it was or stupid as it was. Macri knows he needs to get ARG up to speed and he working on that. Respect it pay your taxes He needs them time to square Argentina away I hope he can do it. Even Uruguay yes I have benefits but I am paying taxes every time I blink with Value added and import taxes every time I buy is like an income tax. LOL no wonder they taking it so easy on us this place is expensive very expensive. But I am sure they know expats with money spend and where does that end up.... ha ha ha.