Yeah essentially it’s just a set of agreements the US has with other nations, each of which is different. But basically your overseas income up to certain amounts will be tax exempt in the US. This is to account for the fact that you’re also paying overseas taxes and using overseas social services instead of US ones. You still have to file your overseas income, but you don’t end up paying any taxes on it, unless it crosses the threshold.
Most people aren’t even living there, they’re just buying into citizenship and a tax haven.
How is it a tax haven? Even when becoming a citizen in another country the US still requires you to pay taxes.
Check out the Foreign Earned Income Exclusion…
I don’t see how that would apply to someone not actually living outside the US as this sub-thread suggests.
“Earned income” means W2 wages not capital gains or any of the other avenues rich people make their money.
Yeah essentially it’s just a set of agreements the US has with other nations, each of which is different. But basically your overseas income up to certain amounts will be tax exempt in the US. This is to account for the fact that you’re also paying overseas taxes and using overseas social services instead of US ones. You still have to file your overseas income, but you don’t end up paying any taxes on it, unless it crosses the threshold.
This reminds me of the Seinfeld episode where Kramer kept insisting that companies “write it off” and Jerry asks if he even knows what that means.