6 ms·

Expats aren’t double taxed but you need to file tax returns to offset taxable income that’s already been taxed. There are specific agreements to avoid double ta

by hayd 2y ago

Expats aren’t double taxed but you need to file tax returns to offset taxable income that’s already been taxed. There are specific agreements to avoid double taxation but it’s unclear/unlikely the IRS are just going to hand back money Apple already paid (it likely falls outside of what’s required in those international agreements). Companies, and people, make decisions based on the tax laws of the day eg deciding to work in the UK, Ireland or the US. States shouldn’t be able to simply retroactively change the tax rules and take money already earned and already taxed. If they can do it to Apple, why not to regular citizens?

timcederman 2y ago
Expats are absolutely double taxed, just less so (and to be clear - majority cases not at all) when a DTA is in effect.
- tansan 2y ago
  In what cases are Americans abroad getting double taxed for the majority of the cases? Don't they have foreign income exclusion?
ghusto 2y ago
> Expats aren’t double taxed but you need to file tax returns to offset taxable income that’s already been taxed. There are specific agreements to avoid double taxation Glad to hear it, because what Americans told me (that they get taxed for the same money they paid tax on in their host country) is bonkers. EDIT: Seems there's some disagreement ;) The other commentor echoes what I've heard from Americans living in Europe. Absolute madness. I also heard it's very costly to try and give up your American citizenship, exactly to protect that juicy free tax America gets from it's expats. > If they can do it to Apple, why not to regular citizens? They already do. Knowledge worker migrants were promised eight years of tax breaks by the Dutch government, who later changed their minds after those people already moved to the Netherlands. This isn't even that though, this is the EU saying the agreement made by Ireland with Apple wasn't legal. It's like how they get people who avoid tax by finding loopholes to pay back-taxes once the tax office catches them (yes, this happens too).
- itake 2y ago
  its complex.. The USA has FEIE, (no federal taxes the first $120k/yr), but not all states (like Cali) honor that and may still charge you state income tax. and FEIE doesn't exempt you from self-employment taxes. and doesn't exempt non-earned income (dividends, etc.). Americans can come out ahead (if they earn less than $120k/yr and live in a 0% tax country). But a non-American (like Canadian) doing the samething, would have less restrictions.
  - EduardoBautista 2y ago
    > but not all states (like Cali) honor that and may still charge you state income tax Whoa, so before moving to a low tax country you should move to a state that is not insane for a while and then move abroad? Crazy.
    - jandrewrogers 2y ago
      Yes, this is a real thing. There are a few States like South Dakota that have kind of made a business of helping expats launder their State citizenship.
    - ApolloFortyNine 2y ago
      Yes, but from reading it sounds like California is a bit of a poison pill and will go at length to try and say you still live there. I've read of cases where even living in another state for 6+ months, drivers license moved over, no property in California, wasn't enough. Not sure how they get away with it really, small volume I guess.
  - returningfory2 2y ago
    This isn’t the full story though, because there is also the foreign tax credit. If your US taxes are lower than your foreign taxes (which they will be if eg you live in Europe) you won’t pay US tax: https://www.irs.gov/individuals/international-taxpayers/foreign-tax-credit https://www.irs.gov/individuals/international-taxpayers/fore...
ysofunny 2y ago
> If they can do it to Apple, why not to regular citizens? because Apple is literally made from tens of hundreds of "regular citizens" or to keep it simple: Apple is a citizen made out of thousands of 'regular' citizens.
jandrewrogers 2y ago
> Expats aren’t double taxed but you need to file tax returns to offset taxable income that’s already been taxed. This is not correct, it is only practically true in trivial cases. Excess taxation is a very real pain point for Americans living overseas, never mind the other indefensible things the US government does to its expats like FATCA. Many types of income cannot be offset nor or they covered by tax treaties. Every time there is an impedance mismatch between US tax code and foreign tax code, including basic things like classification of income, deductions, and exemptions, you can end up with liabilities in both countries. It is not uncommon to pay more taxes in aggregate as an expat than you would pay in either country separately. The way the US government, and some State governments, treat American expats is quite fucked.
- itake 2y ago
  what is even crazier, is its not just Americans impacted by this. If you have a green card, but not working in the USA, you're impacted by this mess too.
  - elevatedastalt 2y ago
    What's funny is America has some of the longest paths to a Green Card (for Indians and Chinese at least), but is very very happy to tax them as a resident the moment they spend a year in the country. Indians effectively pay taxes as residents without any permanent residency benefits for decades
    - itake 2y ago
      Are there any countries where people on a visa don't need to pay taxes like everyone else? If I got a job in India, would I not need to pay taxes?
      - mr_toad 2y ago
        In most countries you’re technically supposed to pay taxes even if you’re working there illegally.
onlyrealcuzzo 2y ago
> If they can do it to Apple, why not to regular citizens? The regular citizen doesn't debate-ably owe billion in taxes. Sure, maybe if you're a centi-billionaire the Winds of Winter might change.

by hayd 2y ago

timcederman 2y ago

Expats are absolutely double taxed, just less so (and to be clear - majority cases not at all) when a DTA is in effect.

tansan 2y ago
In what cases are Americans abroad getting double taxed for the majority of the cases? Don't they have foreign income exclusion?

ghusto 2y ago

> Expats aren’t double taxed but you need to file tax returns to offset taxable income that’s already been taxed. There are specific agreements to avoid double taxation Glad to hear it, because what Americans told me (that they get taxed for the same money they paid tax on in their host country) is bonkers. EDIT: Seems there's some disagreement ;) The other commentor echoes what I've heard from Americans living in Europe. Absolute madness. I also heard it's very costly to try and give up your American citizenship, exactly to protect that juicy free tax America gets from it's expats. > If they can do it to Apple, why not to regular citizens? They already do. Knowledge worker migrants were promised eight years of tax breaks by the Dutch government, who later changed their minds after those people already moved to the Netherlands. This isn't even that though, this is the EU saying the agreement made by Ireland with Apple wasn't legal. It's like how they get people who avoid tax by finding loopholes to pay back-taxes once the tax office catches them (yes, this happens too).

itake 2y ago
its complex.. The USA has FEIE, (no federal taxes the first $120k/yr), but not all states (like Cali) honor that and may still charge you state income tax. and FEIE doesn't exempt you from self-employment taxes. and doesn't exempt non-earned income (dividends, etc.). Americans can come out ahead (if they earn less than $120k/yr and live in a 0% tax country). But a non-American (like Canadian) doing the samething, would have less restrictions.
- EduardoBautista 2y ago
  > but not all states (like Cali) honor that and may still charge you state income tax Whoa, so before moving to a low tax country you should move to a state that is not insane for a while and then move abroad? Crazy.
  - jandrewrogers 2y ago
    Yes, this is a real thing. There are a few States like South Dakota that have kind of made a business of helping expats launder their State citizenship.
  - ApolloFortyNine 2y ago
    Yes, but from reading it sounds like California is a bit of a poison pill and will go at length to try and say you still live there. I've read of cases where even living in another state for 6+ months, drivers license moved over, no property in California, wasn't enough. Not sure how they get away with it really, small volume I guess.
- returningfory2 2y ago
  This isn’t the full story though, because there is also the foreign tax credit. If your US taxes are lower than your foreign taxes (which they will be if eg you live in Europe) you won’t pay US tax: https://www.irs.gov/individuals/international-taxpayers/foreign-tax-credit https://www.irs.gov/individuals/international-taxpayers/fore...

ysofunny 2y ago

> If they can do it to Apple, why not to regular citizens? because Apple is literally made from tens of hundreds of "regular citizens" or to keep it simple: Apple is a citizen made out of thousands of 'regular' citizens.

jandrewrogers 2y ago

> Expats aren’t double taxed but you need to file tax returns to offset taxable income that’s already been taxed. This is not correct, it is only practically true in trivial cases. Excess taxation is a very real pain point for Americans living overseas, never mind the other indefensible things the US government does to its expats like FATCA. Many types of income cannot be offset nor or they covered by tax treaties. Every time there is an impedance mismatch between US tax code and foreign tax code, including basic things like classification of income, deductions, and exemptions, you can end up with liabilities in both countries. It is not uncommon to pay more taxes in aggregate as an expat than you would pay in either country separately. The way the US government, and some State governments, treat American expats is quite fucked.

itake 2y ago
what is even crazier, is its not just Americans impacted by this. If you have a green card, but not working in the USA, you're impacted by this mess too.
- elevatedastalt 2y ago
  What's funny is America has some of the longest paths to a Green Card (for Indians and Chinese at least), but is very very happy to tax them as a resident the moment they spend a year in the country. Indians effectively pay taxes as residents without any permanent residency benefits for decades
  - itake 2y ago
    Are there any countries where people on a visa don't need to pay taxes like everyone else? If I got a job in India, would I not need to pay taxes?
    - mr_toad 2y ago
      In most countries you’re technically supposed to pay taxes even if you’re working there illegally.

onlyrealcuzzo 2y ago

> If they can do it to Apple, why not to regular citizens? The regular citizen doesn't debate-ably owe billion in taxes. Sure, maybe if you're a centi-billionaire the Winds of Winter might change.