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No longer living in the U.S, still need to pay tax for adsense income?

No longer living in the U.S, still need to pay tax for adsense income?

6:36 pm on Jul 27, 2006 (gmt 0)

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I signed up for Adsesne a few years ago when I was living in the U.S. In the begining of this year I moved from the U.S. to another country and have been living this country since then. I will live and work here for most of the year and plan to only visit U.S. a couple of weeks every year for non-business purpose.

As a U.S. permanent residence, I still plan to pay U.S. tax for my other non-Adsense incomes generated from the U.S. But for Adsense, after looking at their Tax guidline, I think I can now be qualified as "Non U.S. Business (No U.S. Activities )" (I don't own servers in the U.S. and my website is maintained here by myself) therefore "No tax forms are required in this instance". I wonder if it's ture that I no longer need to pay U.S. tax for my adsense income as long as I live abroad. Is there anybody in a similar situation (U.S. publisher moved abroad)? Any suggestions?


6:41 pm on July 27, 2006 (gmt 0)

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My suggestion: Talk to a CPA. :)
6:43 pm on July 27, 2006 (gmt 0)

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From my humble experience, no matter where I lived, as long as I remain a US citizen I must pay income tax on all my income, unless there was a reciprocal income tax agreement with the country where I was based at.

This might be different for a corporation, as the income tax in a proprietorship works differently then a corporation.

6:45 pm on July 27, 2006 (gmt 0)

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Your Adsense account is U.S. based, correct?

Unless you plan to live permanently in another country, you will probably have to continue paying U.S. taxes.

May need to ask Google about it.

7:46 pm on July 27, 2006 (gmt 0)

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My rule of thumb: if there's a grey area, a question or possibility that a decision may result in paying no tax or less tax, I take that action and let the IRS figure it out. This has worked out very well for me.

Americans are grossly overtaxed, and, judging by the quality of our representation, should be paying much, much less. (my opinion)

8:45 pm on July 27, 2006 (gmt 0)

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Moving abroad does not exempt your from taxes. If you are a U.S. resident (and I assume the same applies to permanent residents), you are subject to U.S. taxes on your worldwide income. You may receive credit for taxes paid on income from other countries and you may qualify to have some of the income exempted (you'll need to be physically outside the U.S. for 330 days/year- see irs.gov for more requirements).

Google will be reporting your income to the IRS. So if you don't report it on your tax returns, it will definitely get noticed.

As always, consult with your tax advisor for how the various tax laws affect your specific situation.

3:52 am on July 28, 2006 (gmt 0)

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Although everybody else already told you, I wanted to add that you are taxed in the US and considered a "resident" for life... unless you specifically forfeit your resident status.

The IRS has two tests to determine taxpayer status.

#1 is "substantial presence" - anybody who stays over 180 days per year pays their tax in the US

#2 is "greencard" or "citizen" test - anybody who is either is paying taxes and considered a resident.

Now, according to the IRS, you ARE a resident for tax purposes if you meet EITHER of those tests. So, that means either or - you're paying. In short, while you have your green card, it doesn't matter where you live - you pay tax in the US.

On a brighter note, you can deduct SOME of your earnings if you prove to the IRS that your "habitual residence" is abroad. As of a couple years ago, you could deduct up to $80,000, but it's all changing now and I am not a tax lawyer.

Anyway, to summarize, for AdSense purposes you are still a US entity. Sorry!

P.S. With all this said, the US is the only developed country that taxes like this. Pretty much all others developed countries tax based on physical presence.

P.P.S. This response assumes that you are NOT incorporated (abroad). If you are, it's a whole different story. In that case you may be able to avoid US taxation. Be careful, thought, because I don't think that Google will let you "change" your status - even if they agree that you're a non-US (incorporated) entity, they will require you to open a COMPLETELY NEW ADSENSE ACCOUNT and your old one will be shut down - in other words, you'll have to start from scratch.

4:36 am on July 28, 2006 (gmt 0)

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No don't need to pay tax for your Adsense income, however you will need to close your adsense account by informning Google and apply for a new Adsense account, since you cannot change your country of residence in your account settings tab.

[edited by: Gian04 at 4:37 am (utc) on July 28, 2006]

3:36 pm on July 28, 2006 (gmt 0)

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Gian04 is right .You need to apply for a new account.
4:36 pm on July 28, 2006 (gmt 0)

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It might be a bit too obvious, but why not start here:

IRS Publication 54 (2005), Tax Guide for U.S. Citizens and Resident Aliens Abroad [irs.gov]

8:09 am on Aug 1, 2006 (gmt 0)

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The best solution would be to become citizen on the Bahamas and pay no taxes :-) That's what I did if my Adsense earnings multiplied by 10.