Going to the U.S.A.

The United States has a complex system of federal, state, and local levels of taxation. It requires careful navigation. An Australian moving to the United States will be subject to a drastically different system of taxation depending on whether he/she is classified as a resident or a non-resident alien of the United States.

The determination of residency status is critical. As a rule, classification as a non-resident foreign national may provide distinct tax advantages.  However, in individual cases, the advantages of resident versus non-resident status may vary from year to year. Therefore, it is important for foreign nationals coming to the United States to annually review the options available in order to minimize their tax liability in the United States as well as in Australia.

Tax planning and the timing of income recognition and the length of an assignment can significantly affect a foreign national’s U.S. tax liability as the U.S. has significantly more tax reporting requirements compared to Australia.

Taxpayers are often caught by surprise by the requirement to disclose their financial activities outside the U.S. such as:

  • Bank accounts.
  • Interests in trusts, companies and more.

Tax planning is a must before your departure. Do not fly blind.

Albert Einstein: "The hardest thing in the world to understand is the income tax."