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If you live in another country and make over $112,000 USD (2022 number) there, you're paying US taxes on the difference even with the Foreign Earned Income Excl
by brobinson 4y ago
If you live in another country and make over $112,000 USD (2022 number) there, you're paying US taxes on the difference even with the Foreign Earned Income Exclusion. That sucks a lot for a lot of Americans.
- sgjohnson 4y agoWhat’s the top federal income tax bracket? 37%? In most high-income countries with that income, you either won’t pay anything, or the difference will be marginal. There will be very few people in the world for whom renouncing the US citizenship would be worth it long-term. Unless you go full tax-haven, which is also fine.
- deleted 4y ago[deleted]
- brobinson 4y agoWhat do you mean by, "you won't pay anything"? The issue is that you pay taxes to _two_ countries on the same income because you can't shield the income from the US above the foreign earned income exclusion amount. Sorry if I'm misunderstanding you.
- sgjohnson 4y agoYou pay only the difference. There’s also an exemption on taxes already paid to a different country.
- brobinson 4y agoYes, I mentioned the FEIE in the first post you replied to. Wealthy/high income Americans renounce their citizenships to avoid being double taxed if they don't live in the US because the FEIE has a cap and they are double taxed on the remainder.