Tax-free earnings in the world’s top 10 most expensive cities!

Did you know that as an American living and working abroad, the IRS offers certain foreign housing exclusions/deductions that can help defray some of your housing expenses?

We will use the following hypothetical case, to explain how the foreign housing exclusion/deduction works and why it is important to hire a tax professional specialized in international taxation.

An American, let’s call him Mark, was transferred to London by his employer.  Thrilled at the prospect, Mark and his family make the move and settle into a pricy London suburb.

The time comes for Mark to file his first U.S. tax return as an American living abroad. Mark compares expat tax services online, figures they are all the same, and chooses the lowest cost service.  He is pleased to find out from the tax service that in addition to his foreign earned income exclusion (FEIE), as a salaried employee of his company, he also qualifies for the foreign housing exclusion.

The IRS allows you to claim an exclusion from your gross income for your housing amount if your tax home is in a foreign country. In order to qualify you must meet a few criteria, including passing the bona fide residence test or the physical presence test. There is also a foreign housing deduction for self-employed individuals, that essentially accomplishes the same thing for self-employed individuals as the foreign housing exclusion does for employees.

Housing expenses include rent, fair rental value of housing provided in kind by your employer, repairs, utilities (other than telephone), insurance, parking, as well as various other items.  It does not include, interest and property taxes, cost of buying property, household help, or furniture.

The standard foreign housing exclusion is essentially 30% of the foreign earned income exclusion. The foreign earned income exclusion for 2016 is $101,300, which equals a foreign housing exclusion of $30,390. This amount is then reduced by the base housing amount, which is 16% of the foreign earned income exclusion, or $16,208 for 2016. This calculation results in a foreign housing exclusion of $14,182 for 2016.

Mark’s satisfaction with his tax preparer came to an end a few weeks later at a company function while talking to another American living abroad. Mark discovered that that the IRS considers London a high-cost location to live and, therefore, offers a higher foreign housing exclusion than the standard, which his tax preparer failed to take advantage of.

How does this amendment affect Mark’s return?

The higher exclusion could have saved Mark thousands of dollars! Because Mark lives in London, his maximum exclusion rate for 2016 is $82,000 not $30,390! By not doing his homework when securing a qualified tax preparer, Mark overpaid substantially on his 2016 taxes.

Don’t make the mistake Mark did. Find a tax preparer with the international expertise to accurately calculate your taxes or you may end up handing the IRS a large chunk of your hard earned money.

According to the IRS the 10 most expensive places to live outside the U.S. are:

Location                                                          Limitation on Housing Expenses

Hong Kong                                                      $114,306

Moscow                                                           108,000

Geneva                                                              93,300

Osaka-Kobe                                                      90,664

Bermuda                                                           90,000

Angola                                                               84,000

London                                                              82,000

Tokyo                                                                 81,300

Komaki and Gifu                                             74,300

Beijing                                                               71,200

Article from esquiregroup.com

Singapore in talks with firms to try out ‘flying taxis’

 

 
The Hoversurf Scorpion, a human-carrying drone developed by a Russian startup, has already been prototyped and could be an urban-mobility option for Singapore.

Singapore

WANT to get back home at the end of the day in a levitating hovercraft?

Flying vehicles may just be a part of Singapore’s transport network in the near future; in fact, the Ministry of Transport says that you can “bet your money” on it.

It has already taken initial steps to make it happen. The ministry’s top official has told The Business Times that it is in talks with some companies to start trials on drones that can carry passengers.

For full article go to:

http://www.businesstimes.com.sg/transport/singapore-in-talks-with-firms-to-try-out-flying-taxis

READY, JET, GO… World’s fastest jet which could make London to New York a day trip is tipped for take off in 2020 after receiving £26m funding

BOOM Supersonic will cost the same as business class… and budget flights are on the horizon

A SUPERSONIC jet that turn London to New York into a day trip have received £26million funding to build the world’s fastest passenger plane.

The XB-1- dubbed the “baby boom” – is backed by a host of wealthy tech bosses, astronauts and engineers and is tipped to be faster and more efficient than Concorde.

The passenger jet could get you from Tokyo to San Francisco in five hours. Seats will cost the same as major airlines’ business class tickets – but budget tickets could be on the cards as well, according to Boom Supersonic boss Blake Scholl.

Scholl said the jet, which will cost more than£160million to build, could be carrying passengers by the early 2020s.

The XB-1 Supersonic Demonstrator at the official unveiling at the Boom Technologies hanger last year

The XB-1 Supersonic Demonstrator at the official unveiling at the Boom Technologies hanger last year.

For full article go to:

https://www.thesun.co.uk/news/3159547/boom-supersonic-jet-which-could-travel-from-london-to-new-york-in-three-hours-tipped-for-take-off/

These are the 15 happiest countries in the world

Norwegians are a whole lot happier than Americans, according to a new report. Forget buying that new car, opt for a scarf and gloves and head to Norway if you want to achieve true happiness, a new report suggests.

Renowned for its good public services and political stability, Norway can now also claim pole position as the happiest country on earth, having risen in the ranks to surpass Denmark and claim first place in this year’s World Happiness Report.

The study, which measures social factors alongside economic data, points to the limitations of financial factors in achieving happiness. Therefore, Norway vaulted ahead despite its economy being hit by the plummeting oil price, meanwhile happiness in the U.S. continues to wain despite incomes increasing…

Norway sped ahead from fourth place last year to steal the top spot in the annual rankings, which combine economic, health and polling data on approximately 3,000 respondents in each of more than 150 countries. It is joined in the top five by fellow Nordic states Denmark, Iceland, Finland and central Europe’s Switzerland, which averaged a comparable happiness level of 7.5 out of 10.

Norway (7.53)
Denmark (7.52)
Iceland (7.50)
Switzerland (7.49)
Finland (7.46)
Netherlands (7.37)
Canada (7.31)
New Zealand (7.31)
Australia (7.28)
Sweden (7.28)
Israel (7.21)
Costa Rice (7.07)
Austria (7.0)
U.S. (6.99)
Ireland (6.97)

Excerpts of article from cnbc.com

Ranking the Most Dangerous Countries for American Tourists

We filtered out warnings that had been issued for natural disasters, then ranked countries based on the number of Travel Warnings issued against them in an 8-year period between 2009 and 2017. We display the top 25 below.

Source: data.world

Mexico tops the list with 28 warnings in an 8-year period. It’s worth noting that these warnings are regionally specific, targeting sites where crime syndicates are particularly active. Popular tourist destinations like Mexico City and the Yucatán peninsula (including Cancún) are generally regarded as safe.

Most other countries on this ranking are participants in ongoing international conflicts (e.g., Israel, Pakistan, Afghanistan), or are sites in which extremist groups regularly carry out terrorist attacks (e.g., Mali, Nigeria, Syria).

North Korea is an interesting exception, as the government itself presents a danger to American travelers. According to the State Department, foreigners are liable to be jailed for unspecified reasons, or for seemingly innocuous infractions like interacting with the locals or taking unauthorized photos. 

Article from Priceonomics.com