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If you live in the US and you think your taxes are bad, you haven't seen anything yet. The IRS starts to really make your life miserable once you move out of th

by jwr 8y ago

If you live in the US and you think your taxes are bad, you haven't seen anything yet. The IRS starts to really make your life miserable once you move out of the country and live as an expat. The reporting requirements (FBAR and FATCA) border on ridiculous. As an example you need to report all your financial accounts, interest on them with no minimums, you have to know the maximum amount in each account over the course of a year, and BTW, if you are a shareholder in a non-public company, that company's statement goes into your tax filing, too. Preparing your tax return becomes a major project that you do once a year, and you really have to pay a specialized company to do it for you, because there are so many pitfalls. The part that I found most surprising is that in the US there is basically no way for an individual to read the law and follow it. The law is way too complex and murky. As a contrast to that, in most countries that adopted German law principles, it is perfectly normal for a person to go read the law if in doubt.

jmole 8y ago
Those laws were written to make sure the government gets their tax money from people who are way wealthier than you. that's why the law is nearly incomprehensible: it's a compromise between lobbyists of moneyed anti-tax interests and those who are trying to solve legitimate tax dodging problems that arise with expats and international wealth in general.
lukeqsee 8y ago
This. I've spent at least $2000 this year to figure out how to make this work—and I'm going to spend more to actually fill and send the forms off. . . The additional requirements of the recent tax legislation which make it effectively impossible to own a foreign corporation (as an American living in said foreign country) and retain earnings according to the corporation's "home" country's tax laws is even more ridiculous. The IRS demands 10-20% by fiat disregarding all international tax law.
microcolonel 8y ago
The FinCEN (FBAR etc.) stuff is the troublesome stuff, the IRS is actually very easy to work with and the forms are not difficult to file once you know what you're doing (you can go to a cross-border professional filer the first time around to get a handle on it, and then just follow the memos about changes to the procedure each year). As a Canada-U.S. dual citizen I used to find it very difficult to file both, but I think it's just a knowledge gap. The IRS has obligations to you which you'd be laughed out of the room for attempting to exercise with the CRA, so there are positives, even if the tax codes and anti-money-laundering procedures are somewhat onerous. Americans are (in my opinion, excessively) concerned about money laundering and "dark money", so the result is that money is accounted for when Americans control it abroad. The procedures stem from that desire to account for holdings and transactions of Americans abroad: reporting any transactions with other U.S. persons abroad, reporting bank accounts which exceeded 10,000 USD at a credible exchange rate (the IRS posts their own) for the time during which it exceeded 10,000 USD, etc. Evevn here in this thread, you see people concerned that somebody who gets rich in Canada, using Canadian infrastructure and capital, may not be paying "their fair share" of U.S. taxes, which is pretty ridiculous if you imagine the injustice of double taxation that entails. I might make enough money one of these coming years that I have no prudent choice except to become resident in the U.S. to avoid these tax peculiarities.
Pimpus 8y ago
> The part that I found most surprising is that in the US there is basically no way for an individual to read the law and follow it. The law is way too complex and murky. Our nation was founded largely by lawyers.
LorenPechtel 8y ago
The FBAR is the worst--there is very little difference between what you report to the IRS and what you report on the FBAR. If they actually need something that's not on the IRS form then add it to the IRS form. Take the FBAR out and shoot it.

by jwr 8y ago

jmole 8y ago

Those laws were written to make sure the government gets their tax money from people who are way wealthier than you. that's why the law is nearly incomprehensible: it's a compromise between lobbyists of moneyed anti-tax interests and those who are trying to solve legitimate tax dodging problems that arise with expats and international wealth in general.

lukeqsee 8y ago

This. I've spent at least $2000 this year to figure out how to make this work—and I'm going to spend more to actually fill and send the forms off. . . The additional requirements of the recent tax legislation which make it effectively impossible to own a foreign corporation (as an American living in said foreign country) and retain earnings according to the corporation's "home" country's tax laws is even more ridiculous. The IRS demands 10-20% by fiat disregarding all international tax law.

microcolonel 8y ago

The FinCEN (FBAR etc.) stuff is the troublesome stuff, the IRS is actually very easy to work with and the forms are not difficult to file once you know what you're doing (you can go to a cross-border professional filer the first time around to get a handle on it, and then just follow the memos about changes to the procedure each year). As a Canada-U.S. dual citizen I used to find it very difficult to file both, but I think it's just a knowledge gap. The IRS has obligations to you which you'd be laughed out of the room for attempting to exercise with the CRA, so there are positives, even if the tax codes and anti-money-laundering procedures are somewhat onerous. Americans are (in my opinion, excessively) concerned about money laundering and "dark money", so the result is that money is accounted for when Americans control it abroad. The procedures stem from that desire to account for holdings and transactions of Americans abroad: reporting any transactions with other U.S. persons abroad, reporting bank accounts which exceeded 10,000 USD at a credible exchange rate (the IRS posts their own) for the time during which it exceeded 10,000 USD, etc. Evevn here in this thread, you see people concerned that somebody who gets rich in Canada, using Canadian infrastructure and capital, may not be paying "their fair share" of U.S. taxes, which is pretty ridiculous if you imagine the injustice of double taxation that entails. I might make enough money one of these coming years that I have no prudent choice except to become resident in the U.S. to avoid these tax peculiarities.

Pimpus 8y ago

> The part that I found most surprising is that in the US there is basically no way for an individual to read the law and follow it. The law is way too complex and murky. Our nation was founded largely by lawyers.

LorenPechtel 8y ago

The FBAR is the worst--there is very little difference between what you report to the IRS and what you report on the FBAR. If they actually need something that's not on the IRS form then add it to the IRS form. Take the FBAR out and shoot it.