71–80 of 93 posts
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You should not be forced to file taxes for a country you do not live in. Even if there are reciprocity agreements in place.
Yeah there’s always a difference between how the world actually works and how each of us think it should work. The advice here is for the reality-based contingent who want to minimize their tax obligation. For the rest there’s Cryptoland.
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I understand what FEIE is. but as you said, it's the first $112k. BUT, you still have to file every year, which incurs a time and financial penalty. W2 forms aren't designed for mere mortals to fumble their way through, so most outsource it to a tax accountant at a financial cost. Also, tax accountants abroad that specialise in US tax law are both rare and expensive. > medicare/caid tax so you still pay some exactly.…
If you make more than $100k a year a few hundred dollars a year for professional tax prep shouldn’t be a big deal. And the cost of tax preparation and advice is deductible. US citizenship has benefits beyond the passport. What that is worth depends on the individual. People from all over the world wait years for US visas and work permits, so there’s some value and demand implied. I have children and family in the US,…
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Medical insurance and health care abroad for expats costs a lot less in most places, compared the to US. As a US citizen you can’t get out of paying taxes for Social Security and Medicare, just cost of citizenship the way I look at it. Not something I get too wound up over. Even if I can’t benefit from Medicare I am paying in for my parents and other people who can benefit from it, while I pay $50 for a doctor’s visi…
If the goal is to get more people health care, then letting them deduct visits for cheaper care in the country they reside in would be a good thing. It more strain on the US healthcare system and the planet to have expats traveling back for a procedure and the deduction would be less because the healthcare cost is less. And remember the reaction to the House press secretary Jen Psaki saying the US would provide vacci…
Personally, my goal was traveling and living nomadically out of the US. I did that for over six years. Medical care was cheap almost every place I went, and I’m older than the typical 20- and 30-something nomads. My goal was not debating or trying to reform Medicare or the US health care system. Those are noble goals I suppose but not something I want to spend my time on.
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TurboTax has the FEIE worksheet and forms. If you make enough money that renouncing citizenship looks like a good option the cost of tax preparation and opening a foreign bank account are going to be trivial details someone else will handle for you. It’s a hassle for Americans to open bank accounts in some countries because of IRS reporting, but if you have a few million dollars to deposit you won’t have any problems…
TurboTax lobbies to keep the taxes overly complex so they can sell their services, so actually screw them. Almost all of their competitors don't offer service to those without a US address and US filing so your other choice is hiring a CPA.
Intuit may be an evil company, that’s a different subject. But their TurboTax product does handle the FEIE, which is the point I meant to make. You don’t have to hire a tax pro for that, though it may be worth it for complex tax situations or if you have income over $200k/year.
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If you make more than $100k a year a few hundred dollars a year for professional tax prep shouldn’t be a big deal. And the cost of tax preparation and advice is deductible. US citizenship has benefits beyond the passport. What that is worth depends on the individual. People from all over the world wait years for US visas and work permits, so there’s some value and demand implied. I have children and family in the US,…
If it cost "a few hundred dollars a year" and less than 1 day of my time I would be ecstatic. That is nothing like what it actually costs.
Your mileage may vary, but for most people considering the digital nomad thing taxes are not complex or expensive. Very few nomads I met in six years traveling made a lot of money. Their main hassle was self-inflicted: not setting up a US address and keeping a US bank account before they went traveling.
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Until you renounce US citizenship I would advise keeping a US address in a no income tax state, and a US bank account. Don’t tell the IRS or your bank that you moved out of the country. You don’t have to prove where you live or don’t live, just file the forms, pay the taxes, they don’t care. No one comes to the house looking for you unless you have done something criminal. If you don’t have family or friends that wil…
One option: Schwab offers international accounts that can help once you lose your address and can no longer open any US accounts. You can't use ACH or their roboadvisors, however they do pay ATM fees internationally.
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Yeah there’s always a difference between how the world actually works and how each of us think it should work. The advice here is for the reality-based contingent who want to minimize their tax obligation. For the rest there’s Cryptoland.
Sure yes. Those people should definitely renounce.
Renouncing citizenship requires finding another country that will give you citizenship, preferably a country with a strong passport and lower taxes than the US. That option really only makes sense for the wealthy.
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If you maintain a mailing address in a state, it will be on you to prove you don’t live there (and expect to have to do it on a yearly basis). If you have an address outside the US, it is a good idea to tell the IRS to mail you at that address, the states seem to be content with that as evidence that you live out of state.
Until you renounce US citizenship I would advise keeping a US address in a no income tax state, and a US bank account. Don’t tell the IRS or your bank that you moved out of the country. You don’t have to prove where you live or don’t live, just file the forms, pay the taxes, they don’t care. No one comes to the house looking for you unless you have done something criminal. If you don’t have family or friends that wil…
Indeed, Maryland is not a no-income-tax state; However, tax issues are not the only thing one should care about, and I wouldn't just move to a state "on paper" without a good knowledge of what that might legally require me to do.
Do no-personal-income tax states never require that you file anything? Whether it is tax related, or not?
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How do you pay SS and Medicare? I know someone in your situation who was trying to and was told you can only do that if you have US income source (which they don’t have)
I'm going to assume they didn't know what they were talking about as my employer is US based. And by legal definition, the income I'm getting from them is foreign sourced income at least 330-365 days of the year. I'm taking the FEIE deduction yearly. Source doesn't mean what it does to the layman for intl taxes.
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How do you pay SS and Medicare? I know someone in your situation who was trying to and was told you can only do that if you have US income source (which they don’t have)
You file quarterly tax returns and pay the IRS. If you have a full-time job in the US your employer normally deducts and pays those taxes as part of payroll processing.
Mr X is a US citizen who lives outside the US, files and pays US taxes (with deductions taken for locally paid taxes). Mr X wants to also pay into social security and medicare (and whatever other right accrual systems) so that, if they decide to go back to the US so that -- when they retire -- they are entitled to social security benefits and medicare coverage.
The question is: How does Mr X technically pay into these systems, without having any US based income. He knows how to pay income tax (and does), but can't figure out a way to pay SS/Medicare (and doesn't).