Many people who intend to immigrate to the United States or are currently in the process of U.S. immigration are aware that all U.S. residents are required to pay taxes. WorldWay U.S. immigration experts will analyze and summarize the essential tax planning tips that new U.S. immigrants must read:
How to Declare Overseas Assets
The overseas assets that the United States requires to be declared are not total assets, but specific financial assets, such as income from direct investment, indirect investment, business operations, and capital gains from property. Real estate is not included in the declaration, so Chinese green card holders do not need to worry about paying U.S. taxes on domestic properties.
How to Handle Stocks
According to the provisions on the non-step-up of historical costs in the bilateral tax agreement between China and the United States, if you are considering selling stocks purchased domestically, there are two scenarios: if the stock price has fallen, it is better to sell after immigration; conversely, if it has risen, it is better to sell before immigration. The former can result in capital losses, while the latter can avoid capital gains. At the same time, keep transaction records, contracts, and valuation reports safe.
How to Arrange Spousal Assets
There are mainly three scenarios: if both spouses immigrate at the same time, existing assets can remain as they are; if only one spouse immigrates, assets should be adjusted to the non-immigrating spouse; if the spouses immigrate at different times, assets should be adjusted to the spouse who immigrates later.
Overseas Corporate Tax Declaration and Personal Income Tax
If a U.S. citizen or resident serves as an executive or director of a foreign company, and 10% or more of the equity of that foreign company is owned by U.S. persons, it must be declared. U.S. persons who hold control of a foreign company for more than 30 consecutive days in a taxable year must also declare, among other requirements. Personal income tax is declared according to the relevant tax rates.
Overseas Income Tax Credits
According to the relevant provisions of the U.S. Internal Revenue Service's "Tax Rules for Citizens and Green Card Holders Living Abroad," a married couple holding green cards living in China has a total of approximately USD 195,200 (approximately RMB 1.22 million) in overseas income exempt from federal income tax each year.
In addition, according to the relevant provisions of the "Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income," a married couple living in China may still have approximately RMB 600,000 in domestically generated income per person per year, primarily consisting of wages and bonuses, which is not subject to U.S. income tax.
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