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Every time this is brought up I ask the same thing. Has anyone living abroad ever been liable for US taxes? Most people I know or talked to file taxes abroad a

by wil421 6y ago

Every time this is brought up I ask the same thing. Has anyone living abroad ever been liable for US taxes? Most people I know or talked to file taxes abroad and never have to actually pay the US.

ycombobreaker 6y ago
Yes, I know individuals that have needed to dual file and pay. As I understand, they get credited for some amount of taxes paid to the local jurisdiction, so if they live somewhere with a higher tax load and collect a modest salary, they aren't actually paying Uncle Sam. This may explain your observation. If they live someplace with lower taxes or earn a high enough salary they end up paying both jurisdictions. For the individuals I knew, the company accounted for this by paying them some relocation bonus for a few years to offset the additional expected tax load.
- intellirogue 6y ago
  Exactly this. Plus, some tax treaties don't include types of income beyond salary/wage - think income from investments, self-employed/contracting, etc.
IG_Semmelweiss 6y ago
I know of 2 people that have received notices abroad (third world country) about paying US taxes. Neither of them have lived in the us since the early 1970s Turns out if you are a retiree living your golden years in a low tax jursidiction, you are pretty much ignored. However, if you want to just live your life elsewhere and dare to end up successful, (for example, buying property >100k) somehow the US government seems entitled to your earnings.
joshuaissac 6y ago
British Prime Minister Boris Johnson was quite vocal about being having to pay taxes to the US until he renounced his American citizenship in 2016. https://www.forbes.com/sites/robertwood/2019/07/24/prime-minister-boris-johnson-tax-protester/ https://www.forbes.com/sites/robertwood/2019/07/24/prime-min...
- arcticbull 6y ago
  Renunciation also of course has high fees and a massive tax burden. One is required to pay taxes on all of their assets as though they disposed of them on their last day of citizenship or leave (I believe) 30% in a trust to the IRS should it be illiquid.
arcticbull 6y ago
Anyone whose started a small business while abroad is the proud owner of a controlled foreign corporation and required to file form 5471. That ones a mess. The reporting requirements alone are a massive burden, between preparation fees and opportunity cost.

by wil421 6y ago

Every time this is brought up I ask the same thing. Has anyone living abroad ever been liable for US taxes? Most people I know or talked to file taxes abroad and never have to actually pay the US.

ycombobreaker 6y ago

Yes, I know individuals that have needed to dual file and pay. As I understand, they get credited for some amount of taxes paid to the local jurisdiction, so if they live somewhere with a higher tax load and collect a modest salary, they aren't actually paying Uncle Sam. This may explain your observation. If they live someplace with lower taxes or earn a high enough salary they end up paying both jurisdictions. For the individuals I knew, the company accounted for this by paying them some relocation bonus for a few years to offset the additional expected tax load.

intellirogue 6y ago
Exactly this. Plus, some tax treaties don't include types of income beyond salary/wage - think income from investments, self-employed/contracting, etc.

IG_Semmelweiss 6y ago

I know of 2 people that have received notices abroad (third world country) about paying US taxes. Neither of them have lived in the us since the early 1970s Turns out if you are a retiree living your golden years in a low tax jursidiction, you are pretty much ignored. However, if you want to just live your life elsewhere and dare to end up successful, (for example, buying property >100k) somehow the US government seems entitled to your earnings.

joshuaissac 6y ago

British Prime Minister Boris Johnson was quite vocal about being having to pay taxes to the US until he renounced his American citizenship in 2016. https://www.forbes.com/sites/robertwood/2019/07/24/prime-minister-boris-johnson-tax-protester/ https://www.forbes.com/sites/robertwood/2019/07/24/prime-min...

arcticbull 6y ago
Renunciation also of course has high fees and a massive tax burden. One is required to pay taxes on all of their assets as though they disposed of them on their last day of citizenship or leave (I believe) 30% in a trust to the IRS should it be illiquid.

arcticbull 6y ago

Anyone whose started a small business while abroad is the proud owner of a controlled foreign corporation and required to file form 5471. That ones a mess. The reporting requirements alone are a massive burden, between preparation fees and opportunity cost.