First, the basic tax policy of the United States
The United States is a developed country with a perfect tax system. The federal tax law of the United States stipulates that any American citizen, legal resident and temporary resident with a social security card number must declare and pay taxes. According to the detailed rules for the implementation of the Overseas Account Tax Act issued by the US Internal Revenue Service, American citizens and green card holders who have overseas assets exceeding US$ 50,000 need to report to the US Internal Revenue Service, otherwise they will face a fine as high as US$ 1 10,000. If it is not paid after the notice of the IRS, the fine will rise to $50 thousand.
The overseas assets that the United States requires to declare are not total assets, but specific financial assets, such as direct investment income, indirect investment income, business income, property capital gains, etc., while real estate is not declared. China green card holders do not have to worry about the problem that domestic real estate needs to pay taxes to the United States.
Second, fulfill the obligation to pay taxes
Immigration to the United States has a very rigorous process. After obtaining an American immigrant visa, applicants need to enter the United States for registration within 180 days. On the day of landing in the United States, new immigrants begin to fulfill their obligation to declare their property to the United States government. Before becoming permanent residents of the United States, all overseas non-value-added assets do not need to pay taxes to the United States government. Only the value-added income realized after landing needs to be declared to the United States government and paid taxes according to law. Therefore, it is necessary to keep all kinds of proof documents of sources of income and assets, and try to ensure the accuracy of proof of source of property in order to avoid false collection or fines.
For example, the applicant had10000000 USD assets in China before emigration, and he didn't make any money after emigration, so he didn't need to pay taxes after emigration. Simply put, no matter how many assets you owned in China before landing in the United States, as long as they don't increase in value after emigration, it has nothing to do with the US government. This rule is the key to tax planning.
3. There is no double taxation in China and the United States, and overseas income is tax deductible.
The net income from working or doing business overseas for a long time is tax deductible, which is called "overseas income tax credit". For example, the annual tax deduction of 201/kloc-0 in the United States is about $90,000. If the husband and wife live and work overseas together, the annual overseas tax of more than $180,000 is exempt from federal income tax.
China and the United States have already reached an agreement to avoid double taxation. You have paid taxes in China, so you don't need to pay taxes again in the United States. For example, China's corporate income tax is 20-25%, and then dividends are distributed to individuals by 20%, totaling nearly 40%. The individual income tax rates in different States in the United States are about 15-20%, so the tax paid in China can offset the part to be paid in the United States. In addition, the profit income such as house purchase investment is taxed at 20% in China, while the investment income is only taxed at 15% in the United States, so what is paid in China also offsets the part to be paid in the United States.
Reference source
How to solve the global tax policy of the United States and do a good job in tax planning? _ Window of America _ Chinese immigrants
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American immigrants do not need to declare all their assets when paying taxes-San Francisco Bay Area Chinese Information Network
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