3 ms·

That's not double-taxation if the US has a tax treaty with the other nation (which is does with most nations). You get tax credits for foreign income taxes paid

by kspaans 11y ago

That's not double-taxation if the US has a tax treaty with the other nation (which is does with most nations). You get tax credits for foreign income taxes paid such that you pay max(foreign_tax, us_tax).

theandrewbailey 11y ago
(IANATA) If you get tax credits, wouldn't you pay us_tax-foreign_tax if us_tax>foreign_tax ?
- kspaans 11y ago
  Yes, that's my understanding as well (IANATA)! And it's still not double-taxation: if us_tax>foreign_tax, then you pay foreign_tax + us_tax-foreign_tax == us_tax. (Or foreign_tax, if it's greater.) The citizenship taxation system means you can't move away and legally pay LESS taxes than if you'd stayed in the US. But you're welcome to pay more and not have to remit anything extra to the US. ;)
  - lisivka 11y ago
    If you pay two taxes instead of one, as everyone else, then it IS double taxation.
    - kspaans 11y ago
      Wikipedia disagrees with you: https://en.wikipedia.org/wiki/Double_taxation https://en.wikipedia.org/wiki/Double_taxation Specifically, double-taxation is when you pay taxes twice on the SAME earnings. Take the example of a US citizen living abroad in a country with lower income taxes. They will have to pay foreign as well as US income taxes: two like, you point out, rather than one. But the IRS agrees that double-taxation is mean, so they give you a foreign tax credit for the tax you've already paid. You pay an amount to the IRS to make up the difference in income tax. If it were double-taxation you would have to pay the full US income tax on the money you earned, after already having paid the full foreign income tax on it as well. (Note I've been talking about plain-vanilla income, it's a whole new ball-game if you think about other investment income.)
      - lisivka 11y ago
        Wikipedia agrees with me: Double taxation is the levying of tax by two or more jurisdictions on the same declared income (in the case of income taxes), asset (in the case of capital taxes), or financial transaction (in the case of sales taxes).
Larrikin 11y ago
Only if you've been living there over a year. I made the mistake of moving abroad in January and had to pay all of the foreign taxes and all of the US taxes for basically an entire year.

by kspaans 11y ago

theandrewbailey 11y ago

(IANATA) If you get tax credits, wouldn't you pay us_tax-foreign_tax if us_tax>foreign_tax ?

kspaans 11y ago
Yes, that's my understanding as well (IANATA)! And it's still not double-taxation: if us_tax>foreign_tax, then you pay foreign_tax + us_tax-foreign_tax == us_tax. (Or foreign_tax, if it's greater.) The citizenship taxation system means you can't move away and legally pay LESS taxes than if you'd stayed in the US. But you're welcome to pay more and not have to remit anything extra to the US. ;)
- lisivka 11y ago
  If you pay two taxes instead of one, as everyone else, then it IS double taxation.
  - kspaans 11y ago
    Wikipedia disagrees with you: https://en.wikipedia.org/wiki/Double_taxation https://en.wikipedia.org/wiki/Double_taxation Specifically, double-taxation is when you pay taxes twice on the SAME earnings. Take the example of a US citizen living abroad in a country with lower income taxes. They will have to pay foreign as well as US income taxes: two like, you point out, rather than one. But the IRS agrees that double-taxation is mean, so they give you a foreign tax credit for the tax you've already paid. You pay an amount to the IRS to make up the difference in income tax. If it were double-taxation you would have to pay the full US income tax on the money you earned, after already having paid the full foreign income tax on it as well. (Note I've been talking about plain-vanilla income, it's a whole new ball-game if you think about other investment income.)
    - lisivka 11y ago
      Wikipedia agrees with me: Double taxation is the levying of tax by two or more jurisdictions on the same declared income (in the case of income taxes), asset (in the case of capital taxes), or financial transaction (in the case of sales taxes).

Larrikin 11y ago

Only if you've been living there over a year. I made the mistake of moving abroad in January and had to pay all of the foreign taxes and all of the US taxes for basically an entire year.