How can an american citizen start a business overseas-legally?

I am a u.s. citizen working overseas. I have come across many business opportunities overseas. However, I do not have full knowledge of all the tax laws for expatriates. I would like to have all of my i's dotted and t's crossed with all u.s. tax laws.

How can an american citizen start a business overseas-legally?
1. You must file your tax return if your world wide income exceeds the filing requirement.


2. You must report your world wide income.


3. If you paid taxes in the foreign country you can get foreign tax credit.


Read: http://taxipay.blogspot.com/2008/03/us-c...





4. If at any time in a year you have $10,000 or more in foreign accounts, you msut file TD F 90-22.1, Report of Foreign Bank and Financial Accounts. Read: http://mytaxes.in/index.php?topic=1.0
Reply:US citizens and residents are subject to US tax laws on their world wide income regardless of where they live.





If you live in a foreign country you will have to comply with that country's tax laws and pay their taxes. There's no getting out of that.





You MUST still file a US tax return as well. You might be able to exclude some or all of your foreign earned income from US tax, depending upon the circumstances. Alternatively you may take a credit against your US tax liability for the foreign income taxes paid. If you are eligible for both the Foreign Earned Income Exclusion and the Foreign Tax Credit, you may choose whichever works out best for you but you may NOT use both.





Since you will be self-employed overseas you still must pay the US self-employment taxes in the same manner as you would if you lived and worked in the US. Those are not subject to the Foreign Earned Income Exclusion, nor will you receive any credit for foreign self-employment taxes paid. You will also need to make the usual quarterly estimated tax payments to the IRS just as you would if you lived in the US.





The rules on taxation for US expatriates are complex. See IRS Pub 54 for a full discussion of the various benefits and filing requirements. Here's a link: http://www.irs.gov/pub/irs-pdf/p54.pdf





Filing timely tax returns is critical! Filing late can cost you dearly as some of the benefits available to you are lost if you don't file on time.

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