2018 Roster Discussion

[Gotham Gator]

Green card holders pay U.S. tax on foreign income, even when they don't reside in the U.S.

For example, my Australian friend moved to NY to work at a law firm and received a Green Card. He then spent 4 years at that firm's Hong Kong office. He was required to pay U.S. income tax on the income he earned in Hong Kong, which was hard to swallow as Australia (like most countries) did not have the same requirement.

Many U.S. green card holders renounce their permanent resident status if they move back overseas for this reason.

 

[SoupInNYC]

Green card holders pay U.S. tax on foreign income, even when they don't reside in the U.S.

For example, my Australian friend moved to NY to work at a law firm and received a Green Card. He then spent 4 years at that firm's Hong Kong office. He was required to pay U.S. income tax on the income he earned in Hong Kong, which was hard to swallow as Australia (like most countries) did not have the same requirement.

Many U.S. green card holders renounce their permanent resident status if they move back overseas for this reason.

Curious, you say Australia and most other countries don't have the same requirement, what exactly do you mean? That he wouldn't have had to pay Australian tax on income earned in HK?

If I'm remembering my tax class from 8-9 years ago correctly, your friend would be able to use any foreign taxes paid as a credit against his tax liability in order to remove any "double taxation". So the part of this that would be "extra" is if the US tax rate is higher than the HK tax rate.

 

[LeeNYCFC]

Curious, you say Australia and most other countries don't have the same requirement, what exactly do you mean? That he wouldn't have had to pay Australian tax on income earned in HK?

If I'm remembering my tax class from 8-9 years ago correctly, your friend would be able to use any foreign taxes paid as a credit against his tax liability in order to remove any "double taxation". So the part of this that would be "extra" is if the US tax rate is higher than the HK tax rate.

Yes it would be based on the tax treaty between the two, and you are remembering correctly in the case of the US and Australia giving credit for taxes paid. But I can definitely see that being hard to swallow even if it’s just a case of the marginal difference.

 

[Christopher Jee]

Curious, you say Australia and most other countries don't have the same requirement, what exactly do you mean? That he wouldn't have had to pay Australian tax on income earned in HK?

If I'm remembering my tax class from 8-9 years ago correctly, your friend would be able to use any foreign taxes paid as a credit against his tax liability in order to remove any "double taxation". So the part of this that would be "extra" is if the US tax rate is higher than the HK tax rate.

They have to have a tax treaty with the country where income is made. And even when that's the case, it's a pain in the ass.

 

[Gotham Gator]

Curious, you say Australia and most other countries don't have the same requirement, what exactly do you mean? That he wouldn't have had to pay Australian tax on income earned in HK?

If I'm remembering my tax class from 8-9 years ago correctly, your friend would be able to use any foreign taxes paid as a credit against his tax liability in order to remove any "double taxation". So the part of this that would be "extra" is if the US tax rate is higher than the HK tax rate.

At the time (this was 20 years ago) Australia did not tax its citizens residing in other countries. In fact, only 3 countries taxed its citizens abroad, the U.S., Iran and (I think) Panama. More countries do it now. However, by taxing Green Card holders, the U.S. was in the odd position of also taxing foreigners living abroad.

Hong Kong also had then (and continues to have now) very low income tax rates. So, having to pay the U.S. rate was a big deal.

 

[LIexpat]

Was that recent? Approaching a year on my wife’s application now without a decision

I started with an employment application and was still waiting after 6 years when I switched to a marriage based one

 

[adam]

Sadly, this isn't they first thread to devolve into a foreign tax discussion.

Some people are looking forward to March 4th to start the MLS season. Some sickos on this site enjoy it as the beginning of tax season.

 

[SoupInNYC]

Sadly, this isn't they first thread to devolve into a foreign tax discussion.

Some people are looking forward to March 4th to start the MLS season. Some sickos on this site enjoy it as the beginning of tax season.

Is your fantasy team name this year going to be Subway Hat FC?

 

[adam]

Is your fantasy team name this year going to be Subway Hat FC?

You really wouldn't believe how many people ask me if I work for the MTA when I wear it. But then I get to explain about the team, so it's a nice talking point to strike up NYCFC conversations with strangers.

 

[LeeNYCFC]

Sadly, this isn't they first thread to devolve into a foreign tax discussion.

Some people are looking forward to March 4th to start the MLS season. Some sickos on this site enjoy it as the beginning of tax season.

*Major League Spreadsheet season

 

[413Blue]

So basically, a person like David Villa has virtually little incentive to get a green card? Whereas players from lesser developed countries who have lesser earning potential probably jump at the opportunity?

Makes sense, it's not crazy processing delays all the time, but a players preference.

 

[Kjbert]

It was a 6 month loan that ended December 2016, that still put his process over a year. I don't know if they did this, but Xolos is also very easy to hop across the border. I remember that Kekuta Mennah actually lived in Washington state while playing for the Whitecaps.

This. He could have lived in San Diego, right?

 

[Falastur]

So basically, a person like David Villa has virtually little incentive to get a green card? Whereas players from lesser developed countries who have lesser earning potential probably jump at the opportunity?

Makes sense, it's not crazy processing delays all the time, but a players preference.

I mean, the green card is a way for average Joe people like you and me to be given the right to work in a country you otherwise might not meet immigration criteria for. If you've already been given permission to live and reside without it, what's the point in getting one? It's like being given tax exemption for owning a classic car, and then insisting on paying it anyway.

 

[SanBartG]

Green card holders pay U.S. tax on foreign income, even when they don't reside in the U.S.

For example, my Australian friend moved to NY to work at a law firm and received a Green Card. He then spent 4 years at that firm's Hong Kong office. He was required to pay U.S. income tax on the income he earned in Hong Kong, which was hard to swallow as Australia (like most countries) did not have the same requirement.

Many U.S. green card holders renounce their permanent resident status if they move back overseas for this reason.

Not really relevant to Villa but...

Predictably, it’s the same for US citizens. This is why a lot of foreigners actually don’t want US citizenship and why many Americans renounce their citizenship if they stay abroad.

If you’re Villa, the tax implications of pursuing green card status or citizenship are huge.

 

[Gotham Gator]

To be fair to Villa and other players, I don’t think there are any tax implications while they work and reside in the U.S. and they can always renounce permanent resident status later. A Green Card also allows a holder to get in and out of the U.S. more or less at will.

 

[Kjbert]

Would the tax burden of most Western European countries be worse than the taxpayer of a typical US taxpayer?

 

[mgarbowski]

Would the tax burden of most Western European countries be worse than the taxpayer of a typical US taxpayer?

The United States is the only country* that taxes residents on their income worldwide, regardless of where they live and where it was earned.

* Eritrea is possibly the only other.

 

[Falastur]

Would the tax burden of most Western European countries be worse than the taxpayer of a typical US taxpayer?

Yes, though not massively more so. Most Western European countries have a tax rate approaching 50% for their highest earners. The US is also a lot more lenient on how much you have to earn to be in the highest bracket, too, not that that really affects Villa at all.

 

[Seven]

https://twitter.com/x/status/956257872651923456

 

[Ulrich]

https://twitter.com/x/status/956257872651923456

So there is a Plan, and it’s to evaluate him every day in practice and during the games.....