4 ms·

In practice the 2021 108k per person foreign earned income exclusion is reasonably large and uncomplicated to claim. After that the list of countries we have ta

by Rapzid 5y ago

In practice the 2021 108k per person foreign earned income exclusion is reasonably large and uncomplicated to claim. After that the list of countries we have tax treaties with is pretty large: https://taxsummaries.pwc.com/united-states/individual/foreign-tax-relief-and-tax-treaties https://taxsummaries.pwc.com/united-states/individual/foreig...

throw63738 5y ago
In practice US citizens have it difficult to even open simple bank account. Most foreign companies prefer not to deal with US gov.
- welder 5y ago
  Yes! Banks in Germany would flatly say "we can't help you" when I pulled out my US passport. The only one I could get was Number26, which is technically only an online bank account.
  - usr1106 5y ago
    N26 is in the headlines for money laundering incompliance. Probably not at all related to average American expats, but as soon as they strengthen their processes they might find it the easiest not to do business with a couple of Americans.
  - ryanlol 5y ago
    > which is technically only an online bank account. Which is technically also a normal bank account.
- Rapzid 5y ago
  It depends on the country and the financial institution. I'm a permanent resident of another country and had no problem opening an account there(on vacation there the first time no less). Another user here reports a very easy experience opening an account with an institution in the Netherlands.
voisin 5y ago
As the name implies, that only applies to Earned Income. Not investment or business income not taken as salary or any other form of income.
- Rapzid 5y ago
  > After that the list of countries we have tax treaties with is pretty large Would need to look at the tax treaties for the specific country.
- walshemj 5y ago
  Not for things like ISA's in the UK
davidw 5y ago
As someone who lived in Italy for years, it is a total hassle to file US taxes, because you need an accountant that gets all this, and most in the US do not. I agree with her that the system is really bad. We're in the US now, and my Italian wife has none of these hassles: we live in the US and pay taxes in the US and that's that as far as Italy is concerned.
- OldHand2018 5y ago
  > because you need an accountant that gets all this, As someone who has been through this, perhaps you can explain why this is. What makes it so different from US taxes for people living in the US? You definitely do not need an accountant here.
  - LadyCailin 5y ago
    You clearly never owned non-US mutual funds then. If you don’t make much money, and what money you do make is cash, you spend that cash immediately instead of putting it in your bank account, and you don’t care about retirement, then sure, it’s easy. Dead simple, in fact! If you’re pretty normal though, it’s impossible to invest in mutual funds and ETFs outside the US unless you want to deal with PFIC filings (you don’t) and if you live in the EU, you’re double screwed, because they won’t let you buy US mutual funds either. And by the way, the accounting algorithm for FATCA is complete nonsense, because you need the highest value of each account over the year, a number that simply doesn’t exist in most banks, so good luck digging that up properly. And if you don’t, $10k fine if they prosecute. And for retirement, I’m honestly not even sure what to do there, so yeah. It’s a shitshow, and I’m not sure what your situation was that you didn’t feel like an accountant was useful.
  - rev_d 5y ago
    This paper lays it out pretty well. There’s a parallel tax code that is more complicated, and that’s before the nuances of tax treaties factor in. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3795480 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3795480
  - 001Diana 5y ago

by Rapzid 5y ago

throw63738 5y ago

In practice US citizens have it difficult to even open simple bank account. Most foreign companies prefer not to deal with US gov.

welder 5y ago
Yes! Banks in Germany would flatly say "we can't help you" when I pulled out my US passport. The only one I could get was Number26, which is technically only an online bank account.
- usr1106 5y ago
  N26 is in the headlines for money laundering incompliance. Probably not at all related to average American expats, but as soon as they strengthen their processes they might find it the easiest not to do business with a couple of Americans.
- ryanlol 5y ago
  > which is technically only an online bank account. Which is technically also a normal bank account.
Rapzid 5y ago
It depends on the country and the financial institution. I'm a permanent resident of another country and had no problem opening an account there(on vacation there the first time no less). Another user here reports a very easy experience opening an account with an institution in the Netherlands.

voisin 5y ago

As the name implies, that only applies to Earned Income. Not investment or business income not taken as salary or any other form of income.

Rapzid 5y ago
> After that the list of countries we have tax treaties with is pretty large Would need to look at the tax treaties for the specific country.
walshemj 5y ago
Not for things like ISA's in the UK

davidw 5y ago

As someone who lived in Italy for years, it is a total hassle to file US taxes, because you need an accountant that gets all this, and most in the US do not. I agree with her that the system is really bad. We're in the US now, and my Italian wife has none of these hassles: we live in the US and pay taxes in the US and that's that as far as Italy is concerned.

OldHand2018 5y ago
> because you need an accountant that gets all this, As someone who has been through this, perhaps you can explain why this is. What makes it so different from US taxes for people living in the US? You definitely do not need an accountant here.
- LadyCailin 5y ago
  You clearly never owned non-US mutual funds then. If you don’t make much money, and what money you do make is cash, you spend that cash immediately instead of putting it in your bank account, and you don’t care about retirement, then sure, it’s easy. Dead simple, in fact! If you’re pretty normal though, it’s impossible to invest in mutual funds and ETFs outside the US unless you want to deal with PFIC filings (you don’t) and if you live in the EU, you’re double screwed, because they won’t let you buy US mutual funds either. And by the way, the accounting algorithm for FATCA is complete nonsense, because you need the highest value of each account over the year, a number that simply doesn’t exist in most banks, so good luck digging that up properly. And if you don’t, $10k fine if they prosecute. And for retirement, I’m honestly not even sure what to do there, so yeah. It’s a shitshow, and I’m not sure what your situation was that you didn’t feel like an accountant was useful.
- rev_d 5y ago
  This paper lays it out pretty well. There’s a parallel tax code that is more complicated, and that’s before the nuances of tax treaties factor in. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3795480 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3795480
- 001Diana 5y ago