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Unfortunately, it is nowhere near so simple in the US, and they have no regard for expats. The US treats its expats worse than any other country in the world. T

Unfortunately, it is nowhere near so simple in the US, and they have no regard for expats. The US treats its expats worse than any other country in the world. The forms are atrocious. And I could go on about being taxed heavily for services I don't use. As a U.S. expat, I haven't noticed this. The forms aren't as easy as the Danish forms (which are fully automatic and done for you), but not too complex in my situation of just having a regular salaried job. I paid a CPA $200 or something to do it the first time, because I wasn't sure I would do it correctly myself. But the result was pretty readable and basically what I had thought I was supposed to do. Unnecessarily many pages, but simple enough ones. And due to the foreign-tax credit there's no double taxation. I compute my U.S. tax obligation, subtract Danish taxes paid, and the result is always $0, since U.S. taxes are comparatively low.

philiphodgen 13y ago
You are one of the lucky few. :-) Be sure not to invest your savings in mutual funds. Form 8621. Be sure to avoid the local equivalent of an IRA if you want to do retirement savings. The IRS might not think it is a tax-free pension. And they might think that employer contributions are taxable income to you. Don't own stock in a foreign corporation. Don't become an officer with signature power over the corporation's bank account. Be sure to report all of your bank accounts and investment accounts on FinCen 114 (the new FBAR). Don't forget Form 8938 as well, if it applies to you. I'm not saying you can't have a simple tax life as an American abroad. I'm just saying that you have to have a simple life in order to achieve it. The problem is not with the U.S. tax liability. As you said, the foreign tax credit will take care of that. You won't pay U.S. income tax. The real problem is with the paperwork and the penalties for screwing things up.
- sosborn 13y ago
  >The real problem is with the paperwork and the penalties for screwing things up. When I lived abroad I just used a competent CPA. I'm not disagreeing with your statement, I'm just pointing out a viable solution.
- tricolon 13y ago
  Is that what you have to do if you're a citizen? Or does it apply to permanent residents as well?
  - vibrolax 13y ago
    Yes. Being a "US person" includes citizens and permanent residents. http://www.irs.gov/Individuals/International-Taxpayers/Classification-of-Taxpayers-for-U.S.-Tax-Purposes http://www.irs.gov/Individuals/International-Taxpayers/Class...
    - tricolon 13y ago
      Wow, it even applies to resident aliens for tax purposes.
      - deleted 13y ago
        [deleted]
- _delirium 13y ago
  Ah yeah that's true, I could see it being a bigger issue even as a regular salaried employee if I had really moved a lot of stuff to Denmark. As more of an expat than a committed immigrant, I have all my financial stuff in the U.S. still: I contribute to an American Roth IRA, my mutual funds are American ones held with a U.S. brokerage, etc. So all I really do financially in Denmark is pull a salary. Come to think of it, violating Danish tax law is probably the biggest likely issue as a result. E.g. income in the Roth IRA doesn't generate 1099s, because it's not a taxable account. But is that taxable income to a Danish resident? Maybe!
arbuge 13y ago
>> not too complex in my situation of just having a regular salaried job They are pretty much a nightmare if you're an entrepreneur and own corporations abroad. Look up Form 5471. Even for non-entrepreneurs, I would say your experience is way better than most. Most US people overseas who say that taxes aren't a problem for them generally are blissfully unaware of their continuing US tax obligations.

philiphodgen 13y ago

You are one of the lucky few. :-) Be sure not to invest your savings in mutual funds. Form 8621. Be sure to avoid the local equivalent of an IRA if you want to do retirement savings. The IRS might not think it is a tax-free pension. And they might think that employer contributions are taxable income to you. Don't own stock in a foreign corporation. Don't become an officer with signature power over the corporation's bank account. Be sure to report all of your bank accounts and investment accounts on FinCen 114 (the new FBAR). Don't forget Form 8938 as well, if it applies to you. I'm not saying you can't have a simple tax life as an American abroad. I'm just saying that you have to have a simple life in order to achieve it. The problem is not with the U.S. tax liability. As you said, the foreign tax credit will take care of that. You won't pay U.S. income tax. The real problem is with the paperwork and the penalties for screwing things up.

sosborn 13y ago
>The real problem is with the paperwork and the penalties for screwing things up. When I lived abroad I just used a competent CPA. I'm not disagreeing with your statement, I'm just pointing out a viable solution.
tricolon 13y ago
Is that what you have to do if you're a citizen? Or does it apply to permanent residents as well?
- vibrolax 13y ago
  Yes. Being a "US person" includes citizens and permanent residents. http://www.irs.gov/Individuals/International-Taxpayers/Classification-of-Taxpayers-for-U.S.-Tax-Purposes http://www.irs.gov/Individuals/International-Taxpayers/Class...
  - tricolon 13y ago
    Wow, it even applies to resident aliens for tax purposes.
    - deleted 13y ago
      [deleted]
_delirium 13y ago
Ah yeah that's true, I could see it being a bigger issue even as a regular salaried employee if I had really moved a lot of stuff to Denmark. As more of an expat than a committed immigrant, I have all my financial stuff in the U.S. still: I contribute to an American Roth IRA, my mutual funds are American ones held with a U.S. brokerage, etc. So all I really do financially in Denmark is pull a salary. Come to think of it, violating Danish tax law is probably the biggest likely issue as a result. E.g. income in the Roth IRA doesn't generate 1099s, because it's not a taxable account. But is that taxable income to a Danish resident? Maybe!

arbuge 13y ago

>> not too complex in my situation of just having a regular salaried job They are pretty much a nightmare if you're an entrepreneur and own corporations abroad. Look up Form 5471. Even for non-entrepreneurs, I would say your experience is way better than most. Most US people overseas who say that taxes aren't a problem for them generally are blissfully unaware of their continuing US tax obligations.