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> 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 t

> 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.
  - chii 2y ago
    They chose to do it under the terms that have been laid out by the US - so obviously, it's _still_ benefitial for them to continue despite being taxed without representation.
- randunel 2y ago
  I'm a non US citizen nor resident, never have been and probably never will be. Because of FATCA, I had to prove to my Eastern European bank (where I actually am a citizen) that I am not a "US person". That designation has no legal meaning, anywhere in my birth country, yet I had to sign a formal written declaration "I, NAME, declare under penalty of penal law, that I am not a US person", to be able to access my funds again. USA always overreaches.
  - troad 2y ago
    > I'm a non US citizen nor resident, never have been and probably never will be. Because of FATCA, I had to prove to my Eastern European bank (where I actually am a citizen) that I am not a "US person". That designation has no legal meaning, anywhere in my birth country, yet I had to sign a formal written declaration "I, NAME, declare under penalty of penal law, that I am not a US person", to be able to access my funds again. Your bank was terrified of losing access to US markets, so your bank forced you to prove you're not a US person to be super safe about US tax compliance. Seems like your complaint is with your bank, not the US. You're welcome to bank with a bank that has different policies. I have had European bank accounts before and I've certainly never been asked to prove I am not a US person. (On the other hand, I was asked to sign an absurd amount of paperwork that had nothing to do with the US, because it's Europe, and you need thirty-four forms and a notary public to be allowed to even exist.) > USA always overreaches. The US doesn't care about you at all.
    - chii 2y ago
      > The US doesn't care about you at all. of course not - they're a nobody. They don't mean the US cares about the individual - the post is about the general level of regulation that the US is able to force upon third parties. But then again, this is what it means to be sovereign. And to be honest, the US's overreach is not as high as it could've been given how much clout they have. Imagine if it was china in the same powerful position - what would've been the overreach then?
    - realusername 2y ago
      > Your bank was terrified of losing access to US markets, so your bank forced you to prove you're not a US person to be super safe about US tax compliance It's more that a lot of them got fines a decade ago because of that so now US citizens are just straight up banned from most European banks.
panzagl 2y ago
If you don't like then... uh... come back?
- TillE 2y ago
  You're free to renounce American citizenship to escape future tax obligations. Anyway it's not an issue for non-rich expats, you just have to file a tax return which shows you owe $0.
  - okwhateverdude 2y ago
    > You're free to renounce American citizenship to escape future tax obligations. The hilarious thing about this statement is that it costs a few thousand dollars to renounce (as in a fee, paid to the embassy) and they reserve the right to come get you up to ten years later in tax cases.
    - codethief 2y ago
      And IIRC there is some law saying that if you renounce citizenship to avoid taxation, you might never be able to enter the US again. EDIT: https://en.m.wikipedia.org/wiki/Reed_Amendment_(immigration) https://en.m.wikipedia.org/wiki/Reed_Amendment_(immigration) (Thanks, ChatGPT!)
  - 1over137 2y ago
    You also have to be fully up-to-date with the IRS before you can renounce citizenship!
  - ghusto 2y ago
    > You're free to renounce American citizenship to escape future tax obligations. In theory, yes. I knew someone having a heck of a hard time doing so though. Here's the process: https://en.wikipedia.org/wiki/Relinquishment_of_United_States_nationality https://en.wikipedia.org/wiki/Relinquishment_of_United_State... It's pretty expensive and difficult.
  - floydnoel 2y ago
nox101 2y ago
Can you give more specifics?
gamblor956 2y ago
Many types of income cannot be offset nor or they covered by tax treaties. That's news to me and I've been doing international tax for 15 years. Please, tell me what types of income earned by a U.S. expat isn't covered by a tax treaty? It is not uncommon to pay more taxes in aggregate as an expat than you would pay in either country separately. This is objectively false. For an expat, income taxes paid to a resident country are a dollar-for-dollar credit against your U.S. income taxes, and that's on top of the inclusion threshold that doesn't subject the first $X of foreign income to any U.S. taxation at all.
- koyote 2y ago
  > Please, tell me what types of income earned by a U.S. expat isn't covered by a tax treaty? I am not a tax person, but selling a house can cause you to owe tax in the US even if you did not owe any tax in the country you are living in (and sold the house in). Famously one of the reasons Boris Johnson tried to give up his US citizenship (https://www.bbc.com/news/uk-politics-30932891 https://www.bbc.com/news/uk-politics-30932891).
  - sparrc 2y ago
    You are correct, but this only applies because: > Unlike the UK, the US levies capital gains tax on proceeds from the sale of a main residence. I understand why it can feel unfair but by definition this is not "double taxing". The gains on the house were not taxed by the UK which is why he had to pay US taxes.
  - mr_toad 2y ago
    > selling a house can cause you to owe tax in the US even if you did not owe any tax in the country you are living in But you’re not being double taxed.
- gleenn 2y ago
  My understanding, despite the fact I'm definitely not an accountant, was that making over $100K abroad meant you would be double taxed on all of it over that amount. I believe I heard many wealthy Americans abandoning their citizenship just due to this fact.
sparrc 2y ago
On the other hand, I know someone from the UK who moved away and lived in places like Qatar and Oman for 20-30 years, keeping their UK citizenship and paying zero taxes to the UK (and extremely low taxes in the gulf countries). Then they retired, returned to the UK, sent their kids to subsidized state universities (in the UK), receive free healthcare on the NHS, and receive state benefits for retirees. They receive all of these state benefits and they paid almost no taxes to the UK government for most of their adult life. Is that fair?
- cpill 2y ago
  it's not, but it's not the general case and also you realise this is the very opposite of the US: you get taxed when overseas (unless your a large corporation) and then get no benefits when returning because that would be communism.
  - sparrc 2y ago
    That's a bit of an exaggeration, social security (state pension) and medicare (state healthcare for retirees) are not perfect but they're not terrible either.
    - sgerenser 2y ago
      If you were outside the U.S. for most of your working life, it’s unlikely you’d qualify for social security (requires 10 years of work paying into it).
- vasco 2y ago
  If I don't do any of the dodgy parts of that story but move to another EU country with children they'll also get free school, Healthcare and so on. For this to be "fair" you'd need some global EU contribution scheme OR nobody can move.
  - chii 2y ago
    But then do the same people making the argument it's not fair to have paid zero taxes believe that welfare isn't "fair"?
burlesona 2y ago
I once heard a story of a family living abroad feeling quite bent about this extra taxation that they were paying no reason. But the story ends with the family being rescued by a USMC helicopter and airlifted to safety after a natural disaster, at which point they supposed they had been paying for something after all.
- chii 2y ago
  > at which point they supposed they had been paying for something after all. but they would've been rescued regardless of whether they'd been paying their share of taxes, as long as they're a US citizen.
mvonballmo 2y ago
Thank you for summarizing this so well.

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.
- chii 2y ago
  They chose to do it under the terms that have been laid out by the US - so obviously, it's _still_ benefitial for them to continue despite being taxed without representation.
randunel 2y ago
I'm a non US citizen nor resident, never have been and probably never will be. Because of FATCA, I had to prove to my Eastern European bank (where I actually am a citizen) that I am not a "US person". That designation has no legal meaning, anywhere in my birth country, yet I had to sign a formal written declaration "I, NAME, declare under penalty of penal law, that I am not a US person", to be able to access my funds again. USA always overreaches.
- troad 2y ago
  > I'm a non US citizen nor resident, never have been and probably never will be. Because of FATCA, I had to prove to my Eastern European bank (where I actually am a citizen) that I am not a "US person". That designation has no legal meaning, anywhere in my birth country, yet I had to sign a formal written declaration "I, NAME, declare under penalty of penal law, that I am not a US person", to be able to access my funds again. Your bank was terrified of losing access to US markets, so your bank forced you to prove you're not a US person to be super safe about US tax compliance. Seems like your complaint is with your bank, not the US. You're welcome to bank with a bank that has different policies. I have had European bank accounts before and I've certainly never been asked to prove I am not a US person. (On the other hand, I was asked to sign an absurd amount of paperwork that had nothing to do with the US, because it's Europe, and you need thirty-four forms and a notary public to be allowed to even exist.) > USA always overreaches. The US doesn't care about you at all.
  - chii 2y ago
    > The US doesn't care about you at all. of course not - they're a nobody. They don't mean the US cares about the individual - the post is about the general level of regulation that the US is able to force upon third parties. But then again, this is what it means to be sovereign. And to be honest, the US's overreach is not as high as it could've been given how much clout they have. Imagine if it was china in the same powerful position - what would've been the overreach then?
  - realusername 2y ago
    > Your bank was terrified of losing access to US markets, so your bank forced you to prove you're not a US person to be super safe about US tax compliance It's more that a lot of them got fines a decade ago because of that so now US citizens are just straight up banned from most European banks.

panzagl 2y ago

If you don't like then... uh... come back?

TillE 2y ago
You're free to renounce American citizenship to escape future tax obligations. Anyway it's not an issue for non-rich expats, you just have to file a tax return which shows you owe $0.
- okwhateverdude 2y ago
  > You're free to renounce American citizenship to escape future tax obligations. The hilarious thing about this statement is that it costs a few thousand dollars to renounce (as in a fee, paid to the embassy) and they reserve the right to come get you up to ten years later in tax cases.
  - codethief 2y ago
    And IIRC there is some law saying that if you renounce citizenship to avoid taxation, you might never be able to enter the US again. EDIT: https://en.m.wikipedia.org/wiki/Reed_Amendment_(immigration) https://en.m.wikipedia.org/wiki/Reed_Amendment_(immigration) (Thanks, ChatGPT!)
- 1over137 2y ago
  You also have to be fully up-to-date with the IRS before you can renounce citizenship!
- ghusto 2y ago
  > You're free to renounce American citizenship to escape future tax obligations. In theory, yes. I knew someone having a heck of a hard time doing so though. Here's the process: https://en.wikipedia.org/wiki/Relinquishment_of_United_States_nationality https://en.wikipedia.org/wiki/Relinquishment_of_United_State... It's pretty expensive and difficult.
- floydnoel 2y ago

nox101 2y ago

Can you give more specifics?

gamblor956 2y ago

Many types of income cannot be offset nor or they covered by tax treaties. That's news to me and I've been doing international tax for 15 years. Please, tell me what types of income earned by a U.S. expat isn't covered by a tax treaty? It is not uncommon to pay more taxes in aggregate as an expat than you would pay in either country separately. This is objectively false. For an expat, income taxes paid to a resident country are a dollar-for-dollar credit against your U.S. income taxes, and that's on top of the inclusion threshold that doesn't subject the first $X of foreign income to any U.S. taxation at all.

koyote 2y ago
> Please, tell me what types of income earned by a U.S. expat isn't covered by a tax treaty? I am not a tax person, but selling a house can cause you to owe tax in the US even if you did not owe any tax in the country you are living in (and sold the house in). Famously one of the reasons Boris Johnson tried to give up his US citizenship (https://www.bbc.com/news/uk-politics-30932891 https://www.bbc.com/news/uk-politics-30932891).
- sparrc 2y ago
  You are correct, but this only applies because: > Unlike the UK, the US levies capital gains tax on proceeds from the sale of a main residence. I understand why it can feel unfair but by definition this is not "double taxing". The gains on the house were not taxed by the UK which is why he had to pay US taxes.
- mr_toad 2y ago
  > selling a house can cause you to owe tax in the US even if you did not owe any tax in the country you are living in But you’re not being double taxed.
gleenn 2y ago
My understanding, despite the fact I'm definitely not an accountant, was that making over $100K abroad meant you would be double taxed on all of it over that amount. I believe I heard many wealthy Americans abandoning their citizenship just due to this fact.

sparrc 2y ago

On the other hand, I know someone from the UK who moved away and lived in places like Qatar and Oman for 20-30 years, keeping their UK citizenship and paying zero taxes to the UK (and extremely low taxes in the gulf countries). Then they retired, returned to the UK, sent their kids to subsidized state universities (in the UK), receive free healthcare on the NHS, and receive state benefits for retirees. They receive all of these state benefits and they paid almost no taxes to the UK government for most of their adult life. Is that fair?

cpill 2y ago
it's not, but it's not the general case and also you realise this is the very opposite of the US: you get taxed when overseas (unless your a large corporation) and then get no benefits when returning because that would be communism.
- sparrc 2y ago
  That's a bit of an exaggeration, social security (state pension) and medicare (state healthcare for retirees) are not perfect but they're not terrible either.
  - sgerenser 2y ago
    If you were outside the U.S. for most of your working life, it’s unlikely you’d qualify for social security (requires 10 years of work paying into it).
vasco 2y ago
If I don't do any of the dodgy parts of that story but move to another EU country with children they'll also get free school, Healthcare and so on. For this to be "fair" you'd need some global EU contribution scheme OR nobody can move.
- chii 2y ago
  But then do the same people making the argument it's not fair to have paid zero taxes believe that welfare isn't "fair"?

burlesona 2y ago

I once heard a story of a family living abroad feeling quite bent about this extra taxation that they were paying no reason. But the story ends with the family being rescued by a USMC helicopter and airlifted to safety after a natural disaster, at which point they supposed they had been paying for something after all.

chii 2y ago
> at which point they supposed they had been paying for something after all. but they would've been rescued regardless of whether they'd been paying their share of taxes, as long as they're a US citizen.

mvonballmo 2y ago

Thank you for summarizing this so well.