193

Lying to save on taxes is called tax fraud. The threat of large fines and jail-time is what prevents most people from committing tax fraud.


58

The very short version is "laws". The more helpful version is that every state has its own taxation requirements. For instance, if you work in Illinois you are required to file appropriate forms stating what you say your residence is. Every state works a little differently, so you'll need to review every involved state. Here is a law firm's advice on ...


14

Why stop at Indiana? Why not say you live in a tax haven in a completely different country, and not pay any taxes at all, even though you still remain in the same place? Oh, it's called tax evasion. Right. That thing they talk about on TV all the time these days. Many people actually do it (though it's usually a little bit more complex, they set up ...


7

What prevents people from doing this? Laws (if you are lying about your residency) Convenience It won't work for income taxes Wouldn't you save a lot of money assuming the taxes are lower? According to the Illinois Department of Revenue: you must file Form IL-1040 and Schedule NR if you earned enough taxable income from Illinois sources to have a tax ...


7

No. All tax treaties (which allow personal/investment income paid in one country to get shifted to another country) require you to claim (at least in your mind; paperwork might not be needed) an official country of residence for each piece of income. So, you will then need to file taxes for at least one claimed country. If you claim multiple countries, ...


6

The short answer is that I am a UK tax resident for 2019-2020. I pass the so-called "sufficient ties" test, but oh boy, there are so many nuances to this that it makes my brain melt. Buckle up! Tests You figure out whether you're a tax resident or not by following this very specific algorithm: 1. The 183 days Rule Did you stay more than 183 days in the ...


4

To offer a different point of view from the other answers. Each state will have rules about when people will owe income (or other taxes) and what income is to be included in that calculation. There's nothing stopping you from reading the rules and arranging your life such that you avoid a state's income tax. Some states are aggressive, if I remember ...


4

Some adjoining states have reciprocity agreements. In those cases it is where you live that determines which state taxes apply. But if you aren't covered by one of those agreements. Then each state will try and determine if they can claim you. The states set out in their laws what you need to do to claim residency. They look for things like which address ...


3

It's difficult if not impossible to do if you actually live in Chicago, and just have a mail drop in the other state. You'd need to establish effective residency there, by e.g. owning a residence, spending time there, maintaining voter registration, driver's license and so on. All of that is likely to cost more than you'd save in taxes unless you are a) ...


3

Taxation of non-resident aliens There is no tax-free income based on duration of stay. If you earn over the threshold, you will either pay the IRS or submit paperwork that shows you have paid more tax to a government with which they have a reciprocal tax agreement. The difference between staying 182 days and 183 is that at 183 you are considered domiciled ...


3

You meet the Substantial Presence Test for 2017. However, assuming you didn't come to the US in previous years, First Year of Residency rules apply and you are by default a dual-status alien for 2017 -- resident for the part of the year after you entered the US, and non-resident for the part of the year before that. For the part of the year before you came ...


3

The other answer has mentioned "factual resident", and you have raised the existence of a U.S./Canada tax treaty in your comment, and provided a link to a page about determining residency. I'd like to highlight part of the first link: Residency status You are a factual resident of Canada for tax purposes if you keep significant residential ties in ...


3

Every country has their own rules, and some (like the US) require tax filing and paying for global income from their citizens, no matter where you live or work. So check with the country of your citizenship(s), and the countries you lived in while getting income, and you might be liable to pay taxes in one, two, many, all, or none of them. There is no ...


3

This is certainly a complicated topic and it's highly likely that the future will bring us major modification to the official guidance, but as of 2019-2020, the answer is no. Capital gains realised by selling cryptocurrency are NOT foreign income if you're a UK tax resident when you buy and dispose of them. Read Cryptoassets for individuals: HMRC considers ...


2

As with most tax declarations, it is most likely up to you to report this correctly, and HMRC will not automatically consult other people's records to come up with their own answer for you. However they would certainly have the right to check what you claim at some point in the future, and they might expect you to provide some evidence and/or gather their ...


2

Just because you are considered resident in one country for tax purposes does not mean another country will not also consider you resident there for tax purposes. Countries set their own rules for when you are considered a tax resident, and they don't consider whether or not you are also resident elsewhere. So if you were to find another country that would ...


2

It is not true that you "will only become a resident alien after 183 days." Rather, you will only know whether you pass the Substantial Presence Test for 2020 in 183 days. But if you pass the Substantial Presence Test for 2020, you will have been a resident alien for all of 2020, including right now. Passing either the Substantial Presence Test or the Green ...


2

In general, professors on sabbatical are not rendering any services to the institutions hosting them; the services, if any, are being provided to the home institution. Working on a research project at the host institution is not what is giving you the salary; you would have gotten the same money if you had just shut the door to the office provided to you in ...


2

Generally speaking yes. Actual physical residence is not the only test countries use to determine tax residence. Contrary to what many people seem to believe, there is no overarching internationally agreed principle that tax residence only exists if you spend X days in a country or anything like that (in fact, the tax year is not the same in all countries in ...


2

Generally speaking - it least from the US point of view - the answer is absolutely yes. For example: A foreign investor in US real estate is subject to US Federal (and possibly state and local) income tax on capital gains from the sale of the property and on any rental income received with respect to it. A foreign investor receiving dividends from a US ...


2

Because there are much easier ways to cheat on your taxes While moral obligations and legal threats play a part, I believe the main reason is this would be an extremely expensive, difficult way to cheat your taxes. Why (Low/Middle Income) 1) You must establish residency in a state you don't live in. A P.O. box won't cut it. You've got to show a lease or ...


2

Given the situation you can file “married filing separately.” But the details, especially my knowing Fla has no state tax, points to filing single as being a better option. And you need a divorce for that.


2

You are considered a Canadian resident if you have "significant residential ties to Canada". Because your wife lives in Canada, you therefore are a resident. Even by working temporarily in the US, you are still considered a "factual resident" of Canada. Due to that, your second question is irrelevant.


2

You don't have to maintain residency in a country to keep a bank account there. Investments are no different. Unless you plan on investing in property (which some countries require citizenship/residency for) it really doesn't matter where you reside.


2

You have the opportunity to invest anywhere. Developed markets (US, Europe, Japan, etc) generally provide less risk on average compared to emerging markets. Your residency doesn't impact your ability to invest anywhere or in any certain type of security. However, it might be wise to invest in the currency or country that you plan on eventually living. By ...


2

I contacted HMRC about this issue and here's what they said: The guidance stating ‘You cannot use HMRC’s online services to tell them you’re leaving the UK’ relates to filing a self assessment tax return. If you are within self assessment, you would use this method for notifying us about leaving the UK rather than by sending a P85 form. HMRC’s online ...


2

Normally should be as you said. The Logic here is that you can deduct the tax you already payed elsewhere from the tax you have to pay in your home-country. So in Alice's case she already payed more in tax elsewhere - but you cant get more then a 100% deduction. This means in effect that you always pay the highest possible rate in any of the countries ...


2

I would review what is in Publication 519 (2019), U.S. Tax Guide for Aliens as in the Introductory section there is an example on the Substantial Presence Test which includes the following section: The term United States includes the following areas. All 50 states and the District of Columbia. The territorial waters of the United States. The ...


2

Yes, you are eligible for $1800 of Recovery Rebate Credit on your 2020 tax return, since only one of you has an SSN by the tax filing deadline. The recent stimulus bill added $600 "EIP 2" stimulus money, and provided that for a couple filing jointly where only one person has an SSN, they get the stimulus money of one person (see Division N section ...


2

Assuming you did not pass the Substantial Presence Test for 2020, you are by default a nonresident alien for all of 2020. A nonresident alien cannot file jointly (unless treated as a resident). The only married option on the 1040-NR is Married Filing Separately. However, if you were present in the US for the last month of 2020 and those days counted in your ...


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