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Revision as of 22:38, 4 February 2025
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Congress finally acted on New Year's Day, passing the "fiscal cliff" law. This law extended the existing tax rate structure for single taxpayers with taxable income of lower USD 400,000, and married taxpayers with taxable income of less than USD 450,000. For individuals with higher incomes, the top tax rate was increased to 39.6% These limits are determined until the foreign earned income different.
U.S. citizens are for you to shell out taxes on all incomes made in foreign arrives. The proceeds are to be included inside income taxes and vital taxes should be paid. However, for incomes that are taxed the actual foreign countries, taxpayers can include a tax credit equivalent towards the taxes paid but to your limit belonging to the taxes yard have been paid if ever the taxable income was made domestically. For citizens that reside abroad, the IRS provides a tax free waiver for your first $92,900 earned this year.
Defenders of your IRS position would say it comes home to Section 61. The waitress provided a service for me, and I paid as it. Compensation for services is taxable. End of story.
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