4 ms·

This is true but the situation is substantially more complex than you suggest, including things like PFIC treatment of retirement plans in the foreign country (

This is true but the situation is substantially more complex than you suggest, including things like PFIC treatment of retirement plans in the foreign country (where you need to pay unrealised capital gains every year), differing treatment on capital gains of housing, Affordable Care Act penalties if you're in the US more than 30 days. Not to mention any use of the foreign tax credit means you need to calculate AMT. Not to mention none of paperwork you need is nicely collected and presented in US Dollars for you. God forbid you live someplace like Australia that uses a July-June tax year. I have to file my US taxes every year and the "cost" is usually $400 to $800 to hire a tax preparer who knows what they are doing and takes a fair amount of my time every year.

moonshinefe 10y ago
Thanks for the first hand account. I'm not from the US and was just mainly pointing out that a lot of details are clearly left out on news site articles when they try to sensationalize this stuff. I guess at the end of the day the entire situation is very complicated and can't be summed up in a small article. I still don't think it's very accurate how they're portraying it though, nonetheless. The article doesn't mention your situation really at all, it just makes a generalization and moves on.
bogomipz 10y ago
Do you pay taxes only on earnings over the 108K then? I was under that that's what the ceiling was the OP was referring to.
- jimmywanger 10y ago
  I think you pay US taxes only on 108K, plus taxes on whatever tax jurisdiction you're in. Which is kind of a bummer. For the first 108K, AFAIK, you just pay taxes to wherever you earned the money. If you made 100k a year selling widgets from Columbia, you're only subject to Columbian income tax. I don't think there's any such thing as a free lunch - you'll have to pay for one set of taxes no matter what. The US double taxes over 108k.
  - bogomipz 10y ago
    Ouch that's rotten. I thought there was a way to deduct from that 108K whatever you were paying in taxes wherever you were domiciled.
    - maxerickson 10y ago
      Local taxes on earnings above the $108000 can be taken as a credit: https://www.irs.gov/individuals/international-taxpayers/choosing-the-foreign-earned-income-exclusion https://www.irs.gov/individuals/international-taxpayers/choo... However, you can choose to take the foreign tax credit on any amount of foreign income which has not been excluded under the foreign earned income exclusion or the foreign housing exclusion. So it isn't a double tax, the US credits the foreign tax payments.
      - bogomipz 10y ago
        Thanks for the link. I looked it over but I am a bit confused on 108K figure now. Is the 108K additional credit you can take whether a local exclusion has been taken or not? Is that correct?
alistairSH 10y ago
And don't forget banking regulations that force foreign banks to report the activity of American account holders. In some areas, it can be hard for an American to even open an account due to the excessive regulations imposed by the American government. https://www.wsj.com/articles/expats-left-frustrated-as-banks-cut-services-abroad-1410465182 https://www.wsj.com/articles/expats-left-frustrated-as-banks...

moonshinefe 10y ago

Thanks for the first hand account. I'm not from the US and was just mainly pointing out that a lot of details are clearly left out on news site articles when they try to sensationalize this stuff. I guess at the end of the day the entire situation is very complicated and can't be summed up in a small article. I still don't think it's very accurate how they're portraying it though, nonetheless. The article doesn't mention your situation really at all, it just makes a generalization and moves on.

bogomipz 10y ago

Do you pay taxes only on earnings over the 108K then? I was under that that's what the ceiling was the OP was referring to.

jimmywanger 10y ago
I think you pay US taxes only on 108K, plus taxes on whatever tax jurisdiction you're in. Which is kind of a bummer. For the first 108K, AFAIK, you just pay taxes to wherever you earned the money. If you made 100k a year selling widgets from Columbia, you're only subject to Columbian income tax. I don't think there's any such thing as a free lunch - you'll have to pay for one set of taxes no matter what. The US double taxes over 108k.
- bogomipz 10y ago
  Ouch that's rotten. I thought there was a way to deduct from that 108K whatever you were paying in taxes wherever you were domiciled.
  - maxerickson 10y ago
    Local taxes on earnings above the $108000 can be taken as a credit: https://www.irs.gov/individuals/international-taxpayers/choosing-the-foreign-earned-income-exclusion https://www.irs.gov/individuals/international-taxpayers/choo... However, you can choose to take the foreign tax credit on any amount of foreign income which has not been excluded under the foreign earned income exclusion or the foreign housing exclusion. So it isn't a double tax, the US credits the foreign tax payments.
    - bogomipz 10y ago
      Thanks for the link. I looked it over but I am a bit confused on 108K figure now. Is the 108K additional credit you can take whether a local exclusion has been taken or not? Is that correct?

alistairSH 10y ago

And don't forget banking regulations that force foreign banks to report the activity of American account holders. In some areas, it can be hard for an American to even open an account due to the excessive regulations imposed by the American government. https://www.wsj.com/articles/expats-left-frustrated-as-banks-cut-services-abroad-1410465182 https://www.wsj.com/articles/expats-left-frustrated-as-banks...