5 ms·

I would advice anyone considering moving to a different country to spend some time studying FATCA. Even if you move out of the U.S you will still be responsible

I would advice anyone considering moving to a different country to spend some time studying FATCA. Even if you move out of the U.S you will still be responsible for filing taxes every single year unless you renounce your citizenship which is not easy by any means. Foreign banks are required by FATCA law to pass all your financial information to the I.R.S and in some countries they will downright refuse opening a bank account for american citizens to avoid this nuissance.

mattkrause 10y ago
It's annoying and maybe a little invasive, but it's not impossible. The FBAR takes about 10 minutes to fill out and submit, and the bank may want a few extra forms if you earn a lot of interest. Taxes are annoying, but between treaties and the foreign income exclusion or credit, you probably won't be double-taxed.
- spoonie 10y ago
  The US has tax treaties with just about anywhere good want to go, so no double-taxation. (And no, paying income tax in two countries is not double-taxation.)
  - mpweiher 10y ago
    Unlike just about any other country in the world, the US will tax you even if you don't live or derive your income there. Furthermore, also unlike every other country in the world, the US will only deduct the paxes you paid in the other country from the taxes it thinks you owe it on income you earn+spend while living abroad. Every other country considers your tax obligations fulfilled.
    - spoonie 10y ago
      Yes. And because of the tax treaty you get a tax credit for the foreign income tax paid, hence it's not double-taxation.
    - mattkrause 10y ago
      However, you can either 1) Exclude the first ~$100k from your US taxes altogether, or 2) Receive a credit for taxes paid to the other jurisdiction. Most places, particularly those where you'd earn a high salary, have higher tax rates (particularly if taxes cover what would be health insurance in the US), so the credit often completely cancels your US taxes. In many places with lower taxes, it's fairly difficult to earn $100K to begin with, so you're covered there too. The two situations which are tricky are 1) Earning a lot in a low-tax location (maybe oil workers?) 2) Having income from a mix of US and non-US sources (renting out your American apartment?) since your US income gets "bumped up" to the tax bracket associated with your worldwide income.

mattkrause 10y ago

It's annoying and maybe a little invasive, but it's not impossible. The FBAR takes about 10 minutes to fill out and submit, and the bank may want a few extra forms if you earn a lot of interest. Taxes are annoying, but between treaties and the foreign income exclusion or credit, you probably won't be double-taxed.

spoonie 10y ago
The US has tax treaties with just about anywhere good want to go, so no double-taxation. (And no, paying income tax in two countries is not double-taxation.)
- mpweiher 10y ago
  Unlike just about any other country in the world, the US will tax you even if you don't live or derive your income there. Furthermore, also unlike every other country in the world, the US will only deduct the paxes you paid in the other country from the taxes it thinks you owe it on income you earn+spend while living abroad. Every other country considers your tax obligations fulfilled.
  - spoonie 10y ago
    Yes. And because of the tax treaty you get a tax credit for the foreign income tax paid, hence it's not double-taxation.
  - mattkrause 10y ago
    However, you can either 1) Exclude the first ~$100k from your US taxes altogether, or 2) Receive a credit for taxes paid to the other jurisdiction. Most places, particularly those where you'd earn a high salary, have higher tax rates (particularly if taxes cover what would be health insurance in the US), so the credit often completely cancels your US taxes. In many places with lower taxes, it's fairly difficult to earn $100K to begin with, so you're covered there too. The two situations which are tricky are 1) Earning a lot in a low-tax location (maybe oil workers?) 2) Having income from a mix of US and non-US sources (renting out your American apartment?) since your US income gets "bumped up" to the tax bracket associated with your worldwide income.