Tax and Financial Advice for Taxpayers Seeking Overseas Opportunities

Getting an opportunity to work in an overseas nation can be quite rewarding. An employee gets international exposure and at the same time, the compensation package for such expatriate employees is usually significantly high. However, before taking up the opportunity, there are certain factors that you will need to consider. Income Tax Implications Before taking up the job, ensure that you have thoroughly reviewed the income tax implications of the move. Incomes received in foreign nations are taxable by the U.S. as a rule. However, much of the employment income received abroad could be eligible for various tax relief, including credits, exclusions, and deductions. This ideally is set to avoid double taxation for U.S. citizens who are taxed by the local authority as well. Therefore, it is advisable that you consult with your tax preparer to review your specific situation and determine the tax implications of your move (so as to have this covered in your compensation package). Most employers will hire a tax consultant for you to calculate the tax implications of your overseas job relocation. Inheritance Taxes Another area of taxation you should consider before taking up a job overseas is the implication of inheritance for any property that you acquire in the foreign land. Different countries have differing rules as to the taxation process of assets acquired in their country by foreigners. You need to carefully review "the laws of the land" that you will be posted to so as to understand such regulations. Countries like the U.K. will have the property acquired in the nation by expatriates taxed in the country of the beneficiaries for inheritance purposes. In other words, if the beneficiaries are U.K. residents, the U.K. taxation on inheritance will apply. If the beneficiaries are in the U.S., they will have to adhere to the U.S. law in relation to the inheritance. Retirement Savings and Investments Another consideration that you will need to keep in mind is your savings and investments for your retirement or otherwise. This is an important area to remember, as many people take up such jobs away from home mainly to accumulate savings and investments. Some advisers say that it is best to keep savings and investments in U.S. accounts to avoid any foreign exchange losses and to avoid any confrontation with the IRS. If you prefer to have your savings and investments in the U.S., it is best to have the accounts opened while you are still in the U.S. (as some banks and brokerage companies may not open accounts for persons residing in certain states, even if they are U.S. citizens). However 24000 After Tax, if you choose to have your investments and savings in the foreign country, ensure that you comply with the Treasury and IRS's rules for disclosure of foreign accounts. Foreign Exchange Another important aspect you should consider before taking an overseas job is the foreign exchange between the local currency and the dollar. You need to ensure that you are well shielded from any foreign currency fluctuations. Employment consultants advise the emigrant to get a portion of the employment consideration in U.S. dollars and the rest in the local currency. You can then have the portion in the local currency used for your regular expenses and then repatriate the dollar portion for your savings and investments. This will ensure that you do not lose in case the exchange rates become unfavorable. Accommodation and Insurance Other factors that you will need to consider include the insurance coverage and your accommodations. Ensure that the local insurance allows for foreigners to be sufficiently covered. You should especially be mindful about nations such as Canada, where health care is primarily provided to its local citizens by the government. You may need U.S. insurance coverage as local coverage may be limited in such cases. You also need to decide on whether to buy or rent your home in the foreign country; factors to consider include the real estate transfer taxes, whether you can deduct your rent expense, and how favorable mortgages are for foreigners in the country in which you will be working.