An interpretation of the tax policy of American green card holders

An interpretation of the tax policy of American green card holders

An interpretation of the tax policy of American green card holders. According to the tax guide for green card holders issued by the IRS, American green card holders, whether living in the United States or living outside the United States, are obliged to declare their income in any way in the world as long as they are legal permanent residents of the United States.

The scope of global income includes the personal salary income of investment immigrants, overseas bank accounts, equity or stocks and other investment income. In order to avoid double taxation, the United States and China signed an agreement on avoiding double taxation and preventing tax evasion on income. According to the agreement, China citizens who hold green cards have paid taxes in China at the China tax rate, and they can be exempted from the corresponding tax obligation by providing relevant tax payment certificates to the United States. However, due to the different tax systems in the United States and China, green card holders may face the situation that both the United States and China need to file tax returns or even pay income tax at the same time. For example, Mr. Wang's annual income in China is $200,000. After paying personal income tax to the China government according to the China tax rate, he must first remove the income tax paid in China when he declares his personal income to the IRS. If his income is lower than the taxable amount in the United States, he does not need to pay personal income tax to the United States. However, if Mr. Wang still needs to pay personal income tax according to the US tax laws and rates, he needs to pay back personal income tax to the IRS.