4 ms·

> it looks like there are provisions to give you exclusions on your foreign income,if you have any The foreign income exclusion is not that high, especially if

by shard 6y ago

> it looks like there are provisions to give you exclusions on your foreign income,if you have any The foreign income exclusion is not that high, especially if you are a mid career tech worker ($107,600 for 2020), and you will be double taxed on amounts above the exclusion. But at least you can skip California state taxes if you count as a nonresident.

kbenson 6y ago
I guess that's the decision to make. Do you pay extra to keep your U.S. citizenship active, or do you renounce citizenship to pay less? I'm sure different people will have different ideas of what that's worth, but it's available as a choice. People that opt not to renounce citizenship have obviously decided it's worth it to not do so, whether that be keeping future options open, or because they know they plan to return. $100k is a lot of money, even if in many locations its less than a mid-career tech worker salary, so I'm not sure I have any objections to this.
- shard 6y ago
  There is a sense of dissatisfaction when one has to pay the extra tax, while one's coworkers, who are from countries other than the US, do not.
throwawayprc99 6y ago
California taxes worldwide income, and you are still considered a CA resident if you were living there before you left the country.
- shard 6y ago
  I'm not a tax professional, but below is the relevant section from the California Franchise Tax Board's Guideline for Determining Resident Status, which can grant nonresident status depending on the particulars of one's employment: Safe Harbor Safe harbor is available for certain individuals leaving California under employment-related contracts. The safe harbor provides that an individual domiciled in California who is outside California under an employment-related contract for an uninterrupted period of at least 546 consecutive days will be considered a nonresident unless any of the following is met: • The individual has intangible income exceeding $200,000 in any taxable year during which the employment-related contract is in effect. • The principal purpose of the absence from California is to avoid personal income tax. The spouse/RDP of the individual covered by this safe harbor rule will also be considered a nonresident while accompanying the individual outside California for at least 546 consecutive days. Return visits to California that do not exceed a total of 45 days during any taxable year covered by the employment contract are considered temporary.
kalleboo 6y ago
Is that the salary for a mid-career tech worker in the US, or in Europe/Asia? Because tech salaries are a lot lower outside of the US. Also many countries have double-taxation treaties to avoid the double taxation when you exceed $100k I know a bunch of Americans abroad, none of them have to pay any tax to the US, but several of them have to pay specialist accountants to deal with the differences in taxation between the countries. It ends up being a tax on Americans that is not paid to the US but to accountants.
- shard 6y ago
  > Is that the salary for a mid-career tech worker in the US, or in Europe/Asia? Because tech salaries are a lot lower outside of the US. Definitely it depends on the country, the industry, the specific company, and by the definition of mid-career (10 years? 20 years?). > Also many countries have double-taxation treaties to avoid the double taxation when you exceed $100k But then again, other countries do not double-tax from the start, so none of the international coworkers of the Americans abroad have to pay any taxes to their home countries, or for specialist accountants to deal with the differences in taxation.
  - kalleboo 6y ago
    I totally agree it's a ridiculous burden. Americans have a big burden of FATCA, specialist accountants and just a lot of stress in general. And to what end, when most of them end up paying no taxes to the US whatsoever? (this was the point I was trying to make - that after all this BS they are put through, the US is still not getting any extra tax revenue from these people) It seems like it's mostly so that US politicians can say they've done something about high-profile rich people who have moved to tax havens, rather than actually increase tax income measurably.
anang 6y ago
You don’t have to use the exclusion, and in a lot of cases it’s not really beneficial. The other option is to pay the difference in taxes, so if you were taxed at 50% in the country of residence, and the tax bill in the US would have been 45%, you’ll get the 5% back as tax credits towards future US tax obligations. If you’re working in most European nations you’ll probably be paying more in tax than you would in the US.

by shard 6y ago

kbenson 6y ago

I guess that's the decision to make. Do you pay extra to keep your U.S. citizenship active, or do you renounce citizenship to pay less? I'm sure different people will have different ideas of what that's worth, but it's available as a choice. People that opt not to renounce citizenship have obviously decided it's worth it to not do so, whether that be keeping future options open, or because they know they plan to return. $100k is a lot of money, even if in many locations its less than a mid-career tech worker salary, so I'm not sure I have any objections to this.

shard 6y ago
There is a sense of dissatisfaction when one has to pay the extra tax, while one's coworkers, who are from countries other than the US, do not.

throwawayprc99 6y ago

California taxes worldwide income, and you are still considered a CA resident if you were living there before you left the country.

shard 6y ago
I'm not a tax professional, but below is the relevant section from the California Franchise Tax Board's Guideline for Determining Resident Status, which can grant nonresident status depending on the particulars of one's employment: Safe Harbor Safe harbor is available for certain individuals leaving California under employment-related contracts. The safe harbor provides that an individual domiciled in California who is outside California under an employment-related contract for an uninterrupted period of at least 546 consecutive days will be considered a nonresident unless any of the following is met: • The individual has intangible income exceeding $200,000 in any taxable year during which the employment-related contract is in effect. • The principal purpose of the absence from California is to avoid personal income tax. The spouse/RDP of the individual covered by this safe harbor rule will also be considered a nonresident while accompanying the individual outside California for at least 546 consecutive days. Return visits to California that do not exceed a total of 45 days during any taxable year covered by the employment contract are considered temporary.

kalleboo 6y ago

Is that the salary for a mid-career tech worker in the US, or in Europe/Asia? Because tech salaries are a lot lower outside of the US. Also many countries have double-taxation treaties to avoid the double taxation when you exceed $100k I know a bunch of Americans abroad, none of them have to pay any tax to the US, but several of them have to pay specialist accountants to deal with the differences in taxation between the countries. It ends up being a tax on Americans that is not paid to the US but to accountants.

shard 6y ago
> Is that the salary for a mid-career tech worker in the US, or in Europe/Asia? Because tech salaries are a lot lower outside of the US. Definitely it depends on the country, the industry, the specific company, and by the definition of mid-career (10 years? 20 years?). > Also many countries have double-taxation treaties to avoid the double taxation when you exceed $100k But then again, other countries do not double-tax from the start, so none of the international coworkers of the Americans abroad have to pay any taxes to their home countries, or for specialist accountants to deal with the differences in taxation.
- kalleboo 6y ago
  I totally agree it's a ridiculous burden. Americans have a big burden of FATCA, specialist accountants and just a lot of stress in general. And to what end, when most of them end up paying no taxes to the US whatsoever? (this was the point I was trying to make - that after all this BS they are put through, the US is still not getting any extra tax revenue from these people) It seems like it's mostly so that US politicians can say they've done something about high-profile rich people who have moved to tax havens, rather than actually increase tax income measurably.

anang 6y ago

You don’t have to use the exclusion, and in a lot of cases it’s not really beneficial. The other option is to pay the difference in taxes, so if you were taxed at 50% in the country of residence, and the tax bill in the US would have been 45%, you’ll get the 5% back as tax credits towards future US tax obligations. If you’re working in most European nations you’ll probably be paying more in tax than you would in the US.