Individuals moving abroad
US citizens and green card holders are generally taxed on worldwide income wherever they live, so moving abroad usually changes how US tax is computed rather than whether it applies. Exclusions for foreign earned income and credits for foreign taxes paid can reduce the US bill, but they have to be claimed on a filed return. Giving up citizenship or ending long-term residency can trigger an exit tax for people who meet certain tests, including a failure to certify past compliance. Foreign accounts, foreign companies, and foreign pensions bring reporting duties that continue after the move. The order of events, such as selling property or exercising stock options before or after departure, can also matter.
Leaving New York
New York often looks closely at people who say they have left the state, particularly high earners. The state can treat you as a resident if your domicile is still New York, and it can also treat you as a resident for a year in which you keep a home here and spend enough time in the state. Residency audits generally ask where your life is actually centered, often using phone, credit card, and travel records to test the answer. Keeping or selling a New York home and where your family lives both carry weight. Keeping clear records of the move from the beginning makes those audits easier to answer.
Moving a business offshore
Moving functions, employees, or intellectual property out of the United States can create US tax when assets are transferred to a foreign entity, even if no cash changes hands. Ongoing payments between the US and foreign companies have to be priced on arm's-length terms, and both countries may review them. A foreign subsidiary's income can, under some rules, be taxed to its US owners before it is distributed. We look at what is actually moving, who will own it, and how the move will be documented, and coordinate with advisers in the destination country. For individuals and businesses alike, we begin with the timeline, because many of the choices that matter have to be made before the move rather than after it.
