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If you are an American living abroad, how is you income from trading handled? Are you obligated to pay state and federal taxes even if you aren't living in the United States, but still own property here?
This might be a question that @big-mike can answer.
It's just a casual question, so there's no need to consult a tax professional, presently, because I haven't reached the point where I am prepared to live abroad.
I know there are some countries where you can be a "tax citizen" which would absolve an American from paying U.S. federal and state taxes.
Legendary / Stochastic Calculus is not your friend
Experience: None
Platform: Ninjatrader, Python API
Broker: CQG
Trading: S&P, Crude, Gold
Posts: 858 since Oct 2009
Thanks Given: 3,452
Thanks Received: 1,544
@ZB23 there are multiple scenarios regarding taxation if you are a US citizen living abroad. Many factors go into your tax scheme...I think the biggest one is how long you are out of the US...and how many times you make entry into the US per year. The tax breaks you might perceive as being beneficial, but you could end up having to pay taxes in your host country of residence...could make for a pretty big whoopsie daisy! ......Don't ask me how I know : )
One thing to consider is living in a country that offers digital nomad visas....they are getting pretty common now...this allows you to live and work in the country without having to pay any taxes.
The short answer is, yes as long as you are an American citizen or green card holder, you will always have to pay tax in the US. The US is one of a few countries who tax their citizens on any income, regardless of where they live, or where it is earned. I cannot speak about state taxes, but my assumption is that since you don't live in the US, only Federal tax applies. I haven't lived in the US for the last 8 years, but still have a house in TX that do not have state tax.
The long answer is that there are several other aspects with regards to tax treaties and tax credits between the US and the country you currently reside, and you will not be double taxed and only pay the difference, if any. Also you might qualify to exclude the first $120K, as of 2023. It can get complicated quickly.
