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You won't be double taxed, the US taxes the difference between your local income tax rate and the US federal tax rate. So if you live in London you're not payin
by fyrn_ 1y ago
You won't be double taxed, the US taxes the difference between your local income tax rate and the US federal tax rate. So if you live in London you're not paying any US tax because the UK income tax rate is higher. It helps stop rich people from "totally live in <tax haven>". If only we had that for companies..
I think where people get confused is that it's implemented as a tax credit which is equal to the income tax you pay locally.
On top of that the first $130k earned is also exempt, so it only applies to high earners as well
- potatototoo99 1y agoUnless you move to a country without a tax treaty to prevent double taxation with the US.
- hiAndrewQuinn 1y agoNot "unless". You have to actively review the tax treaty to see whether it actually gives you things superior to the US's own Foreign Earned Income Exemption. Those documents aren't the hardest things in the world to read, but they're not light reading either.
- roshin 1y agoAnother issue is if another country has some tax free benefits (like Roth IRA) America taxes the extra.