RealSurgerymax
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As an American citizen, we are taxed no matter where we go. We're the only country who has citizenship based tax.
If I was a citizen of any other country, I could pay ZERO taxes since I am living in multiple countries never long enough to trigger tax resident status.
Its outrageous. I was seriously about to renounce my US citizenship because its simply not worth paying 35%+ taxes for the rest of my life to support a bunch of losers on welfare, when I don't even live there. I spent every single day of 2024 abroad yet paid US Federal taxes.
If I renounce I would buy a Carribean CBI (Citizenship by Investment) passport for $250K (either Grenada or St Lucia) which gives the same visa free access to EU zone, and basically all other countries as my US passport, except for the US itself.
I used to think that the citizenship based tax meant I am taxed the same no matter where I go. But with a special structure thats not the case.
The first 126,500K is 0% tax under Foreign Earned Income Exclusion. There are other exclusions and deductions like Foreign Housing Exclusion which effectively shield the first $180K as tax free.
Additional distributions (payments to yourself) should be as dividends in the following year, from your foreign company. NOT as additional salary or bonuses over 180K, then they would be taxed at the normal rate.
So the playbook basically is:
So your effective tax rate is a combination of your 0% tax rate salary + your 10.5% dividend. Here's a table showing your effective tax rate under this structure depending how much you make:
As you can see your tax rate is under 10% making over $2M/year, under 5% if making just over $300K, and 0% in mid $100K range. Even if you're making $1B it will always be under 10.5%
Now I really have something to think about. Maybe worth paying taxes and keeping US citizenship or maybe it's better to just renounce and be able to legally pay 0%. I am not sure..........
If I was a citizen of any other country, I could pay ZERO taxes since I am living in multiple countries never long enough to trigger tax resident status.
Its outrageous. I was seriously about to renounce my US citizenship because its simply not worth paying 35%+ taxes for the rest of my life to support a bunch of losers on welfare, when I don't even live there. I spent every single day of 2024 abroad yet paid US Federal taxes.
If I renounce I would buy a Carribean CBI (Citizenship by Investment) passport for $250K (either Grenada or St Lucia) which gives the same visa free access to EU zone, and basically all other countries as my US passport, except for the US itself.
I used to think that the citizenship based tax meant I am taxed the same no matter where I go. But with a special structure thats not the case.
The first 126,500K is 0% tax under Foreign Earned Income Exclusion. There are other exclusions and deductions like Foreign Housing Exclusion which effectively shield the first $180K as tax free.
Additional distributions (payments to yourself) should be as dividends in the following year, from your foreign company. NOT as additional salary or bonuses over 180K, then they would be taxed at the normal rate.
So the playbook basically is:
- Live outside the US for at least 330 days per year.
- Incorporate your business in a tax free or low tax (under 10.5%) jurisdiction. Like a carribean tax haven or Dubai. (Dubai free zone is 0% corporate tax and Dubai Mainland is 9% flat tax.) The reason it should be under 10.5% is because thats the lowest corporate tax rate you can legally achieve as a US citizen, operating a foreign company (US companies are taxed at 21%) and you can apply Foreign Tax Credits (taxes you paid in a foreign country) to contribute toward your US tax liability. So For US citizens, it doesnt need to be a 0% tax jurisdiction (although it simplifies things) it just needs to be under 10.5%.
- Now pay yourself a salary of 126,500 - 180,000 and enjoy it tax free.
- Opt into FC status (not default status which is to have your foreign company treated as a pass-through entity.) This means numerous forms have to be filed and they MUST be filed by professionals. They are very complicated and have stiff penalties if you do it wrong. It will cost about $5K to have a CPA do this every year, but the tax savings are well worth it if ur making mid to high 6 figs. Even low six figs its still a better deal.
- Keep additional profits in the Foreign Corporation for the entire tax year, and pay CORPORATE TAXES on it to the US using GILTI (Global Intangible Low Tax Income) rules and applying Statute 962 reduction. This cuts your corporate tax rate in half (10.5%) and then pay yourself what profits you want to the following year. They are considered Pre-Taxed Income (PTEP) and cant be taxed again. You are officially taking them at 0% tax personally because they were taxed at the corporate level the previous year. So it's an effective tax rate of 10.5% maximum on any additional income to your already 0% taxed 180K salary. Keep in mind PTEP only applies to Foreign Corporations. If ur in the US you get double taxed lol.
So your effective tax rate is a combination of your 0% tax rate salary + your 10.5% dividend. Here's a table showing your effective tax rate under this structure depending how much you make:
| $126,500 | 0% |
| $200,000 | 1.6% |
| $300,000 | 4.6% |
| $600,000 | 7.5% |
| $2M | 9.6% |
| $5M | 10.1% |
| $10M | 10.3% |
| $50M | 10.46% |
As you can see your tax rate is under 10% making over $2M/year, under 5% if making just over $300K, and 0% in mid $100K range. Even if you're making $1B it will always be under 10.5%
Now I really have something to think about. Maybe worth paying taxes and keeping US citizenship or maybe it's better to just renounce and be able to legally pay 0%. I am not sure..........
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I just can’t prove it
