One Financial Mistake That Can Cost Expats Living Abroad Millions - and We See This All Too Often When We do Tax Returns

Too many expats and others living abroad keep all of their savings and investments in low interest paying bank or savings accounts in the USA. This is historically a big mistake.  It is understandable that you want to keep your funds in the USA, because the banks and currency in your country of location may not be stable or safe. However, other than some reserves a US bank account is not the answer.

Investing in the stock market (over the long run and in good conservative companies) and real estate (in areas where history shows the values will increase significantly in the future - Such as California) will give you a nest egg on retirement of 3 to 4 times the amount you will have if you just keep it all in a bank earning interest.  The worst place to keep it as you can see in the following article is under your mattress.

Read More in the following Washington Post article http://wapo.st/2ucJSBq

Remember also, investments in stocks and real estate abroad is mostly treated the same for US tax purposes as investing in US stocks and bonds. However, investing in foreign mutual funds can result in you having to pay higher taxes (thanks to the US Mutual Fund Lobby).  Want to discuss your investment  and tax strategy. Email Don at ddnelson@gmail.com.  We have assisted hundreds of clients on their way to accumulating retirement wealth.

US Tax Ramifications of Forming a Foreign Corporation to Do Business Abroad

There are significant consequences (on your US tax return) when you form a foreign corporation in a country outside of the USA to operate your business or make investments in any other country in the world. Most offshore accountants and attorneys do not know enough about US international taxation to advise you of the consequences which should be considered in advanced.  It is much harder to correct the US tax problems which WILL occur later if you do not do your US tax planning in advance.

You need to consider the following US IRS reporting and election consequences:

• Controlled foreign corporation rules
• Subpart F income possibilities
• Passive foreign investment company rules.
• Possible Flow Through Election for US tax purposes.
• Subpart F personal holding company rules
• The need to file FBAR forms to report foreign bank accounts
• Transfer Pricing
• Possible Tax on Transferring intangible property and tangible property to a foreign corporation

We can help you plan your foreign corporation structure to avoid unpleasant and possibly expensive consequences for failing to consider the rules set forth above.  Many of these items are difficult to deal with after you have already formed your foreign corporation.

Keep in mind their are also special rules which apply to foreign partnerships, foreign LLCs and foreign trusts which must also be considered.