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FATCA Pushes “Accidental” Americans to Give Up US Citizenship

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Re: FATCA Pushes “Accidental” Americans to Give Up US Citizenship

#121

Post by kingosticks »

wiredfool wrote: post #101
sjg007 wrote: post #24

I thought there were tax treaties, basically you don't pay taxes on the first $100k if you paid into the national tax system of the country you are in. I can imagine FICA taxes though might be difficult. Maybe US social security would deny benefits if you claimed them without any contributions and residence abroad.

There are actually two exclusions for countries on the treaty list, one is the first ~100k of income, and the other is a tax credit for taxes paid in the other country. So, if you happen to be an expat in a higher tax country (which is certainly Europe), then you won't owe taxes in the US. You still have to file, which can cost $500 for an accountant to make sure everything is correct, but owing taxes isn't really an…

Not always true. Some things may be tax free in your resident country (e.g an ISA in the UK) but pay normal tax rates in the US. Since credits from each income category are separate, you may not have enought credit in the 'bank interest' category to cover what the US demands (I'm simplifying but that's essentially the issue). It may be a small amount but it's still owed tax and I'd imagine it's quite a common situation.

Re: FATCA Pushes “Accidental” Americans to Give Up US Citizenship

#122

Post by KLexpat »

clawoo wrote: post #38
icu wrote: post #23

The solution is to use your accidental US citizenship to your advantage. The US is actually a remarkable tax haven and has some amazing trust structures if you know what you're doing. For example the Roth IRA, will in most cases due to reciprocal tax treaties, allow for a tax free pension even when your tax residency is in another county. On top of the trust structures I've alluded to, there are few reciprocal data s…

Yeah, I was surprised the article completely glossed over why nobody outside the US wants to deal with FATCA, because on face value it sounded like a good tool to prevent money laundering and tax haven stashing. But based on FATCA, only the other countries have a responsibility of reporting wealth information about US citizens, while if you are a Russian or a Brit or whatever you can safely stash all your wealth in t…

This is generally correct. One of the main effects of CRS being separate to FATCA is that a person from a CRS country like anywhere in the EU, UK, Aus, Canada, NZ... many countries... can hold assets in the US itself which is not a CRS signatory.

Re: FATCA Pushes “Accidental” Americans to Give Up US Citizenship

#123

Post by eesmith »

muststopmyths wrote: post #9

So, these people chose to keep their US citizenship, but chose to not follow the rules ? The woman was brought over as a baby, but chose to keep the citizenship into adulthood, presumably acquiring a passport or other citizenship documents. Otherwise how are the banks finding out ? Why should she be surprised if the IRS eventually comes for her ? Seems like giving up citizenship is the right solution for these people…

> but chose to keep the citizenship into adulthood

I don't believe it's possible to renounce US citizenship until adulthood, in which case there is no choice.

Re: FATCA Pushes “Accidental” Americans to Give Up US Citizenship

#124

Post by sailingparrot »

ipnon wrote: post #106
sailingparrot wrote: post #87

Earlier quoted context omitted.

> If I basically stop being a citizen of the US by moving to another country why do I need to continue paying for it? You don't "stop" being a citizen. Part of the process to apply for citizenship is education about what becoming a citizen means through the civics test, and it should be very clear to you that this is not meant to be just a convenient thing that you do as a formality. Citizenship comes with rights but…

Renouncing your US citizenship isn't a stop?

This was in response to the quote:

> If I basically stop being a citizen of the US by moving to another country

And I was saying you don't stop being a citizen by moving somewhere else.

Citizenship is not something you can (or should be able to) just turn on and off at your convenience.

Re: FATCA Pushes “Accidental” Americans to Give Up US Citizenship

#125

Post by mensetmanusman »

NotPavlovsDog wrote: post #57

US citizenship comes with a big administrative burden even if you don't live in the US. Some parents with European citizenship sometimes do not file an American birth certificate when registering their child for a European birth certificate. I.e. if the country facilitates registration of child based on parent citizenship and not birth location of child, they just never declare the child was born in the US. "It was a…

Many thoughts occurred while reading this, including: ‘Almost the pinnacle of first world problems’

Re: FATCA Pushes “Accidental” Americans to Give Up US Citizenship

#126

Post by KLexpat »

elgatonegro wrote: post #65
nvarsj wrote: post #55

Earlier quoted context omitted.

So you're saying it's all okay as long as you remain a permanent employee your entire life with a company owned pension plan? Is that a joke? What if you want to buy property, invest in a business, open up a private retirement fund, or a million other things. All of these are a massive land mine for any American living abroad. On top of that you have things like FACTA that affects everyone. This kind of stuff has neg…

Buying property doesn't expose you to GILTI/transition taxes. Neither does investing in a business. You just have to pay taxes on income derived from that business, as normal. FATCA can be completely nullified by not maintaining foreign bank accounts. Keep your money in the US, problem solved. Maybe that's not an option for everyone but it's still an option.

https://cashmanagement.bnpparibas.com/currency/myr

"MYR is considered to be a restricted currency, which implies an inherent limitation to the tradability of this currency. Fund transfers in this currency are not allowed outside of Malaysia"

Lets say you work in Malaysia; your salary is paid in MYR as its legally required to be. You can't get a bank account with most banks because US passport - therefore you can't get a MYR bank account.

Re: FATCA Pushes “Accidental” Americans to Give Up US Citizenship

#127

Post by Someone »

happynacho wrote: post #95

I would love if there was an option to buy their citizenship for that $2350 fee, hell even double would be a no-brainer. Strange how some people want to get rid of it and how others want it no matter what.

That $2350 fee is just the tip of the tip of the iceberg. Asking to become a non-American also is an admission that you know you are an American. https://americansoverseas.org/en/how-to-renounce-us-citizens...:

“Renouncing your U.S. citizenship will not automatically cancel your tax obligations. Prior obligations remain, so you would only be a non-resident on an ongoing basis. You must notify the IRS of the change in your status by filing Form 8854 and then filing a copy with the Department of Treasury as well.

You will be treated as a U.S. citizen for tax purposes until you file this form. The same rules apply to green card holders. You must file the form as soon as possible after you renounce your citizenship.“

To make matters worse, there’s an exit tax (https://americansoverseas.org/en/knowledge-centre/us-taxes-a...). That applies only if you have over $2 million of net worth or “if you have not complied with your US tax obligations for the last five years.”

You pay it over all your assets, including houses and future pensions, and it’s up to 23.8%.

Re: FATCA Pushes “Accidental” Americans to Give Up US Citizenship

#128

Post by Androider »

throwawayiionqz wrote: post #118
NotPavlovsDog wrote: post #57

US citizenship comes with a big administrative burden even if you don't live in the US. Some parents with European citizenship sometimes do not file an American birth certificate when registering their child for a European birth certificate. I.e. if the country facilitates registration of child based on parent citizenship and not birth location of child, they just never declare the child was born in the US. "It was a…

What happens the day your kid shows the wrong passport at Port of entry? TSA Officer: "Hi foreigner, you don't have ESTA?" Kid: Oh sorry this is the wrong birthplace passport. Take at look at this one plz

Plenty of countries allow dual citizenship, including the US, Canada and most of the EU, so it's not that unusual to have and travel with multiple passports.

Re: FATCA Pushes “Accidental” Americans to Give Up US Citizenship

#129

Post by Mediterraneo10 »

dragandj wrote: post #31
Mediterraneo10 wrote: post #19

Earlier quoted context omitted.

> Also as far as owing onerous back taxes go, aren't taxes you paid in your country of residence deductible ? No, the USA has treaties with only some other countries that result in net-zero taxation of self-employed people. If you live in a country with which a tax treaty has not been concluded, and you are self-employed, you are liable to both your local country for income taxes etc., and to the USA for Social Secur…

OTOH, isn't there a poverty-line amount in USA that makes some income level practically tax-free (through deductions, etc.)? I imagine that in most countries $15.000 / year is a rich person's income, while in USA it puts you under "starving". What I want to say, if you're living in, say, Kazakhstan, earning a good fat paycheck of $1000 a month and living like a king, shouldn't you file "I'm starving poor at $12000" t…

Kazakhstan is not a cheap country, at least not the cities of Almaty and Astana where foreigners are likely to live. They regularly appear on "Most expensive cities" lists.

Social Security and Medicare is paid by American workers regardless of their total income. That is, there is no poverty limit under which they do not have to send that money to the IRS.

Re: FATCA Pushes “Accidental” Americans to Give Up US Citizenship

#130

Post by clubber88 »

voisin wrote: post #6

The US could solve most of its expat issues if they simply said foreign accounts are those accounts foreign to your current place of residence. By saying foreign means foreign to the US, they’ve made it very challenging to form banking relationships in expats’ countries of residence. The next step would be to repeal citizenship based taxation in favour of residency based taxation like every other country on earth (ex…

And take away their right to vote.

I’m an expat and I’m not allowed to vote and I don’t owe my home country any taxes (Canadian in the US)

That’s the way it should be. I shouldn't tell my home country how to live a life I have no stake in, and they should not charge me taxes for services they cannot render abroad.

End taxation and voting abroad!

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