Brazil Expat Forum

Brazilian tax on American Social Security income

1/8/2022 12:23 EST

If I am correct, the US offers a tax credit for taxes paid in Brazil on foreign income. My concern is that the Brazilian tax rate is higher than the American rate. Has anyone dealt with this? Thank you in advance.

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VovoBillinBrazil

2/8/2022 12:44 EST

Here's a follow-up to my other message. I know a guy that teaches English. He is from Boston and lives in Central Brazil. He made about R$24,000 teaching. His tax burden in Brazil was about 19% or $4600.

That doesn't mean it is his only income to live off of. It is the money he made IN Brazil. FEI (Foreign Earned Income).

How the IRS will treat that 19% is unknown to me. I suppose then will add that R$24,000 (divide by 5.3 the current exchange rate) = US$4528.30

Now add the US$4528.30 to your normal tax burden in the US and you will be taxed upon your total. MINUS the tax you paid in Brazil.

If you only transfer US$15,000 to Brazil and do not have a business. You will only be taxed on the $15,000 in Brazil. Then you will get the FEI discount calculation by the IRS.

I have a feeling the Brazil Tax Authority will keep an eye on anyone Expating. Just a feeling.

I literally just had this conversation with a bookkeeper today for our business in Brazil. I would recommend you contact a Tax Attorney down there. They will set you straight.

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VovoBillinBrazil

9/13/2022 10:53 EST

Here is a Youtube video that explains our US Tax obligations as expats.

4 parts to it. This is only the first. https://youtu.be/RaVX7wlBld8

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