Thanks for your response
Who would I be employed by? I'm not paying self employment taxes. I don't have a w2 or pay taxes other then capital gains. That was always my impression.
There aren't any bills under my name. I'm not paying rent or own any housing anywhere. I was living in a no capital gains tax country, Hong Kong. I'm working with my accountant now, but I wanted to find out some answers myself. Just want to double check. My accountant says, that the profits that were made while abroad won't be subject to state income tax given that I lived there for minimum 6 months.
The information my accountant needs are which of the 6 months I was abroad and what my profit/loss was for each month of 2015. Since, I have long running positions, I'm not sure how to provide the profits for each month.
Your initial post said you're living abroad. I responded to that and I told you that it depends on the country involving if they have a "treaty" with the U.S.
Now in your reply, you're saying Hong Kong...I know nothing about Hong Kong. Yet, I'm going to assume you've been in Hong Kong less than a year because would be strange to ask these questions now if you been living there for several years.
As someone else stated about state taxes...depends on the state. Yet, you've now provided more info as to suggest your particular state (I don't know what state that is)...you're not subject to state income tax given you've lived in Hong Kong for a minimum of 6 months...info given to you by your accountant.
Shouldn't you be calling your state to verify what your accountant told you and asking you questions about (e.g. which of the 6 months abroad) instead of asking anonymous people at a forum ?
I'll give you the warnings again plus a few more and only listen to them if they apply:
1) Banks and other financial institutions now communicate with the IRS. Be careful if you're moving large sums of money from U.S. financial institution to another country financial institution.
2) Do not claim unemployment benefits if your accountant or you claim your occupation is a trader and that you're profitable. The U.S. have something (I don't know what its called) that if you're trading is your only income and you're not working for someone as a trader...you get listed as
self-employed.
3) If you're broker is a U.S. broker...they forward your profit income to the IRS and the broker give you an end of year summary. U.S. is noisy, they just want to know.
4) If you're using someone's address in the U.S. as you're home address while living abroad, you need to be careful especially when dealing with any important state or government documents that are
time sensitive. You're basically telling them that's where you're at when in reality they don't know you're in another country.
I'm not sure why you're using a family members address considering the IRS, states, governments do take foreign addresses unless you just don't want them or some organization to know where you're really at or you plan on returning to the U.S.
**** 5) If you're living abroad for a small duration in line with a tourist visa or something like that and you're
not in that foreign country as a legal resident of that country...you have to pay taxes on your profits to the U.S. government (state).
The above 5) is an important issue with the U.S. states and government. Some people think just because they live in another country while
not a legal resident of that country or they've consecutively renewed their visa in that country as a "visitor"...they think they can skip out on U.S. taxes. As you can see...that's why you need to be very careful about listing the address of a family member or close friend as your home address while living in another country as a "visitor". It sends a red flag.
Simply, make sure you have legal residency in Hong Kong. I remember one of the first questions I was asked in my audit...
you a legal resident of this country ?
If you have no income including no profits from your trading...get some state tax papers or IRS papers...easiest tax papers you'll have to fill out. Thus, file (send) them anyway even though you owe nothing and they pay you nothing as in a refund.
P.S. Get a copy of your state and government tax guide books especially documentation for self-employment. Whatever you tax accountant tells you...have him verify it to you via referring to the tax documents you have.
They all have a telephone hot line for U.S. citizens living abroad although usually
not toll free. Specifically ask about the
foreign earned income exclusion with Hong Kong and how much is that if your accountant didn't tell you anything about it or the amount.
P.S.S. If your profits involves large sums of money and you're moving your money around (financial institution to financial institution)...make sure your tax accountant is certified and not some family friend you trust that's not certified as a tax accountant.
You'll be surprise at how many people let someone due their taxes and that person isn't even a certified tax accountant.
