The United States is taxed globally. Do I have to pay two taxes after immigrating to the United States?

Here, several common misunderstandings about American taxation are corrected and explained:

Once the US green card is obtained, will the US tax the global assets (including China) of the green card holders?

A: This understanding is completely wrong.

First, let's introduce the definitions of assets and income. Assets are the wealth you have acquired from the past to the present, and the income is your investment income or salary, bonus and commission income in that year. The global tax policy of the United States only targets personal income, not personal assets.

For example, suppose you have 20 million yuan of real estate for rent in China, and you get 2 million yuan of rent every year. Once you get the green card, the IRS will not ask you to pay taxes on the property assets worth 20 million RMB, but only declare the annual rental income of 2 million RMB.

Do I have to pay more capital gains tax after I get my green card?

A: After you get a green card, the United States has the concept of asset income tax, but this asset income tax only needs to be declared when you sell your assets.

The Overseas Account Tax Act (FATCA) requires other countries to provide the IRS with the investment income of American residents in the country and the interest and dividend income obtained from American assets, including bank account information such as account balance, interest and payment destination. What impact will it have on green card holders?

A: The Overseas Account Tax Law (FATCA) only involves the information notification of bank account funds, not the notification of fixed assets such as real estate. Information notification and tax payment are two completely different concepts. You don't have to pay any taxes as long as you fill out one more declaration form.

Once you get a green card in the United States, do you have to pay American tax on all domestic income?

A: In fact, the United States has an annual tax allowance of nearly $90,000 for those who earn income overseas (there is a requirement to live overseas).

For example, if both husband and wife get a green card and each person earns $654.38 million+from China every year, then if they file tax returns separately, after deducting the tax allowance of $90,000, each person only needs to pay the tax return fee of 1 10,000 per year. And this $10,000 can be deducted if you have paid taxes in China or have business expenses in the United States.

Welcome to the American section of Migrants Home Network to ask questions.