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> with $10k of financial engineering the problem goes away for forever As an American this upsets me greatly to hear. I feel it makes living abroad, especially

> with $10k of financial engineering the problem goes away for forever As an American this upsets me greatly to hear. I feel it makes living abroad, especially to families of average means in this country, almost an impossible feat. I also wonder if only leaving the country for short duration vacation/business contributes to the "We're the best country ever!" mentality here and the "Wow, look at those weirdos over in America" mentality abroad. Or maybe that's just me paying too much attention to the news lately.

patio11 11y ago
almost an impossible feat. FWIW: this is clearly not the case. It's just a paperwork burden with occasional inconveniences, some bigger than others. Millions of Americans, most of whom have more modest means than the typical software engineer on HN, make it work.
- stalcottsmith 11y ago
  Agreed. People make more of a deal about this than it is. If you are actually doing business overseas or own an actual operating business corporation overseas employing people (depending on the country), US paperwork looks relatively benign. The real harm for business people overseas is that opportunities may be closed for you to invest in other businesses or to join a board or something because your status as a US Person causes a burden for others. At the 100 million dollar level I imagine this is not a big deal but at the startup and smaller growth company level it seems problematic. This reduces the opportunity for soft diplomacy and representing the brand of America to foreign people of means and substance. I would be curious to know if you have experienced or anticipate experiencing this. Perhaps where you are is more closed to foreigners but there are countries where foreigners do lots of business. Have you been invited to invest or participate in boards?
deong 11y ago
If you're "of average means", then you can simply color within the lines, do exactly what the law tells you to do, and almost certainly have no problems at all. You only need the $10k to successfully cheat.
- jleyank 11y ago
  I think I've posted this before, but contributing to the thread... Doing my US taxes takes about 3 hours, as it's basically updating the previous year's forms to reflect whatever changes have been made and adjusting for salary and exchange rate. As I live in a country with higher taxes than the US, I don't pay anything. US-ians living abroad will become familiar with form 1116 and 2555... Yeah, FATCA introduces additional paperwork (or web-work at the moment). But, I have to fill out similar paperwork for my current country to account for my US-resident accounts. So I guess both countries wish the other would just go away?
- T-hawk 11y ago
  Figuring out "exactly what the law tells you to do" is the tricky part. The law merely prescribes the step-by-step instructions for each form. It will not explain the emergent behavior that you'll need to know to optimize your way through the system. It will not advise you ahead of time to do things like spend no more than 30 days in the US to qualify as a foreign resident. You wouldn't even know that's a relevant question to ask unless informed by a suitable expert. This sort of thing is the financial engineering that patio11 is talking about. It's not cheating, it's doing what the system is meant to let you do, if only you understood the best paths through the system. I have a similar situation on a smaller scale. I live in one US state and work in another. I file income tax for both, and there's a form that takes my tax liability to my state of work and backs it out of my liability to my state of residence. I wouldn't have known that form existed and would have just assumed I had to pay full tax to both states, if not for TurboTax directing me to that form. The law will direct you how to mechanically comply, but it won't direct you against complying in ways hurtful to yourself.

patio11 11y ago

almost an impossible feat. FWIW: this is clearly not the case. It's just a paperwork burden with occasional inconveniences, some bigger than others. Millions of Americans, most of whom have more modest means than the typical software engineer on HN, make it work.

stalcottsmith 11y ago
Agreed. People make more of a deal about this than it is. If you are actually doing business overseas or own an actual operating business corporation overseas employing people (depending on the country), US paperwork looks relatively benign. The real harm for business people overseas is that opportunities may be closed for you to invest in other businesses or to join a board or something because your status as a US Person causes a burden for others. At the 100 million dollar level I imagine this is not a big deal but at the startup and smaller growth company level it seems problematic. This reduces the opportunity for soft diplomacy and representing the brand of America to foreign people of means and substance. I would be curious to know if you have experienced or anticipate experiencing this. Perhaps where you are is more closed to foreigners but there are countries where foreigners do lots of business. Have you been invited to invest or participate in boards?

deong 11y ago

If you're "of average means", then you can simply color within the lines, do exactly what the law tells you to do, and almost certainly have no problems at all. You only need the $10k to successfully cheat.

jleyank 11y ago
I think I've posted this before, but contributing to the thread... Doing my US taxes takes about 3 hours, as it's basically updating the previous year's forms to reflect whatever changes have been made and adjusting for salary and exchange rate. As I live in a country with higher taxes than the US, I don't pay anything. US-ians living abroad will become familiar with form 1116 and 2555... Yeah, FATCA introduces additional paperwork (or web-work at the moment). But, I have to fill out similar paperwork for my current country to account for my US-resident accounts. So I guess both countries wish the other would just go away?
T-hawk 11y ago
Figuring out "exactly what the law tells you to do" is the tricky part. The law merely prescribes the step-by-step instructions for each form. It will not explain the emergent behavior that you'll need to know to optimize your way through the system. It will not advise you ahead of time to do things like spend no more than 30 days in the US to qualify as a foreign resident. You wouldn't even know that's a relevant question to ask unless informed by a suitable expert. This sort of thing is the financial engineering that patio11 is talking about. It's not cheating, it's doing what the system is meant to let you do, if only you understood the best paths through the system. I have a similar situation on a smaller scale. I live in one US state and work in another. I file income tax for both, and there's a form that takes my tax liability to my state of work and backs it out of my liability to my state of residence. I wouldn't have known that form existed and would have just assumed I had to pay full tax to both states, if not for TurboTax directing me to that form. The law will direct you how to mechanically comply, but it won't direct you against complying in ways hurtful to yourself.