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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?
This might be different for a corporation, as the income tax in a proprietorship works differently then a corporation.
Americans are grossly overtaxed, and, judging by the quality of our representation, should be paying much, much less. (my opinion)
joined:Dec 10, 2005
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.
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.
[edited by: Gian04 at 4:37 am (utc) on July 28, 2006]