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The US is one of the last developed nations that does not have a national maternity pay program. If you are self-employed, the government will not subsidize taking time off from your business. In order to effectively prepare for pregnancy and childcare without letting your business suffer, consider some of the following:
· Four states (California, New Jersey, Massachusetts, and Rhode Island) offer disability insurance. Their programs only cover around 60% of salary and last 6 weeks or less. If you live in one of these states you can pay a small amount from your paycheck to qualify for benefits when you have to take time off.
· If you do not live in one of these states, you can purchase short-term disability insurance from a private insurance provider. Make sure you know how long you must pay premiums before you can collect benefits. This should provide you with income similar to what you earned before you had your child.
· Hire someone to help run your business while you are gone. While you work from home, this person can meet with clients and take care of day-to-day business operations. This small expense can help prevent a dip in sales or loss of clients.
· If you want to maintain a more active role in your business, ask family members to help care for your child while you are gone. Be sure to do this while you are pregnant so you are prepared if you need to continue working after you have the baby.
· Make sure not to add to your workload. Avoid extra stress during this time by putting off any large-scale business changes and try to say no to new clients for the time being.
As a US citizen living and working outside of the US, it is often possible to exclude part- or even all of your foreign income and self-employment income from federal tax through the Foreign Earned Income Exclusion (FEIE).
As an American living abroad, US taxes can be complex. We have had a brief look at some of our US expatriate tax cases to identify common US tax mistakes and make recommendation on how to avoid them.
A deduction/exclusion that is massively under claimed amongst US expatriates is the Foreign Housing Exclusion/deduction. The exclusion/deduction works in conjunction with the Foreign Earned Income Exclusion (FEIE) and is an allowance that includes some of your housing expenses from your gross income on your US tax return.
The allowance is deductible at different thresholds depending on where you live and how many days you have lived outside of the US.
The Foreign Earned Income Exclusion (FEIE) is a deduction that the IRS allows to certain US citizens and resident aliens living and earning income abroad on a consistent basis.
What is foreign earned income?
Foreign earned income is classed as income from either employed or self-employed work. It does not include passive income from investments such as interest, dividends, IRA distributions or rental income.
A few examples that the IRS (taxpayers) have given includes on what doesn’t qualify as foreign income includes:
As an expert in tax for US expats we are expert in identifying US expats tax filing obligations, reliefs, deductions and exclusions. This article is aimed at helping US expats identify whether their income is taxable in a foreign country.
Over the years, we have come across thousands of US expat who are behind on their taxes. This article focuses on US expats who have either missed the June 15th tax deadline over a month ago or perhaps are years behind.
As a US tax accountant based in Covent Garden and New York we make it our business to keep all of our clients informed and up to date on how the latest US tax changes will affect them.
The U.S. has entered into a number of agreements with countries worldwide named ‘Totalization Agreements’. The agreements aim to serve the purpose of avoiding double taxation on income in respects to social security taxes.
As an accountant for US expats, we have come across many self-employed expats that don’t know where their US tax obligations start and finish.
If you are a US Expat entrepreneur thinking of starting a business or going self-employed your expat taxes will be more complex than the average expat. Below is our guide on the tax implications of going self-employed or starting up a business as a US expat.
Adjusted Gross Income. Companies such as Efile operate tax software - an online automatic system allowing easy preparation and filing of your California state tax return. Basic state tax return forms are automatically calculated with the relevant data you provide, and any additional state forms are also listed if completion is necessary. Filing state tax returns in California can be done singularly or alongside federal tax returns.
As an accountant with over 10 years experiences accounting for US Expats and non-resident aliens based in the UK, we are expert in advising about all matters surrounding US tax.
This article is aimed to break down the US tax rates, penalties and interest US Expats and non-resident aliens should be aware of.