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Cost of Renouncing US Citizenship Goes To $2,350

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Hero
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Post by Hero » September 1st, 2014, 1:25 am

Yohan wrote:About USA, I see no reason why you should renounce citizenship anyway, except if you are really very rich.
The reason is to avoid double taxation if you're living abroad.

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Ghost
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Post by Ghost » September 1st, 2014, 8:14 am

Hero wrote:
Yohan wrote:About USA, I see no reason why you should renounce citizenship anyway, except if you are really very rich.
The reason is to avoid double taxation if you're living abroad.
And the first $100,000 a year is safe from the daddygov. Most Americans working abroad are in TEFL work. Even the highest paid get nowhere close to that kind of pay.

Renouncing citizenship is only for the rich anyway. Commoners can't afford it. So for the majority of us, it isn't even a possibility. Now, marrying a foreign national on the other hand...
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Hero
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Post by Hero » September 1st, 2014, 12:02 pm

Ghost wrote: Renouncing citizenship is only for the rich anyway.
Still, I hope one of those rich American guys who wants to renounce citizenship will sue the USA in the International Court of Justice. Like they say, it's not the money, it's the principle.

Rock
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Post by Rock » September 1st, 2014, 12:19 pm

Ghost wrote:
Hero wrote:
Yohan wrote:About USA, I see no reason why you should renounce citizenship anyway, except if you are really very rich.
The reason is to avoid double taxation if you're living abroad.
And the first $100,000 a year is safe from the daddygov. Most Americans working abroad are in TEFL work. Even the highest paid get nowhere close to that kind of pay.

Renouncing citizenship is only for the rich anyway. Commoners can't afford it. So for the majority of us, it isn't even a possibility. Now, marrying a foreign national on the other hand...
You forgot a whole class of US persons - investors. The 100K tax free allowance only applies to foreign 'earned' income, not foreign derived interest, dividends, rents, and capital gains. Many who build up a modest nest egg and plan to invest it overseas in bonds or real estate for a stable ongoing cash stream will have to share that income with Uncle Sam back home.

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Post by Jester » September 1st, 2014, 9:37 pm

Luc Furr wrote:
Jester wrote:
Stunned to see this.

They are clearly threatened and worried.

And stupid.

If I am made to stay, there will be trouble.

Homeland security just put you on the no fly and terrorist watch lists. There are no idle threats anymore.
You worry way, way, way too much.

Man up.

There are HOUSEWIVES making clear violent threats using their own names on web forums. And they still fly. (granted it's not legally provable, because it's not facebook, and the threats are based on "if" or "maybe". )

Don't give the fearmongers more power than they have.

Jester
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Post by Jester » September 1st, 2014, 9:44 pm

Yohan wrote:
To be honest, it does not make any sense to renounce the US-citizenship while still living within USA.

To renounce the US-citizenship makes only sense after relocation to a foreign country and after creating over there a financially stable long-stay condition with a new citizenship and with no intention to return to USA.

For people earning just average salaries in USA or overseas it is likely better to keep the US-citizenship and to fill in the tax-report every year - as there is not much what can be taxed anyway.
This is the truth.

FEI exemption allows no tax on "earned income" if you stay abroad all but 30 days a year. (or have a "tax domicile" abroad, meaning being a taxpaing resident, and stay out of the USSA most of the year...).

But you still pay SE tax of 15% or so on earned income.

But I've analyzed it, and it doesnt make sense to renounce unless you're up in six figures.

Rock's point about investors is well-made. Investors don't get the FEI exemption.

So here's a question for Rock:
Among the tax-treaty countries, more or less the Anglo and Euro OECD-type countries plus maybe a few others, there are provisions to avoid double tax. Do these provisions generally apply to dividends and rents etc?

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eurobrat
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Post by eurobrat » September 1st, 2014, 11:50 pm

Jester wrote: But I've analyzed it, and it doesnt make sense to renounce unless you're up in six figures.

Rock's point about investors is well-made. Investors don't get the FEI exemption.

So here's a question for Rock:
Among the tax-treaty countries, more or less the Anglo and Euro OECD-type countries plus maybe a few others, there are provisions to avoid double tax. Do these provisions generally apply to dividends and rents etc?
With 2 passports, why even bother telling them you're overseas if you're making your money off investments?

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Post by Jester » September 2nd, 2014, 12:23 am

eurobrat wrote:
Jester wrote: But I've analyzed it, and it doesnt make sense to renounce unless you're up in six figures.

Rock's point about investors is well-made. Investors don't get the FEI exemption.

So here's a question for Rock:
Among the tax-treaty countries, more or less the Anglo and Euro OECD-type countries plus maybe a few others, there are provisions to avoid double tax. Do these provisions generally apply to dividends and rents etc?
With 2 passports, why even bother telling them you're overseas if you're making your money off investments?
Probably true in most cases....

But some places you need legal residency to buy real estate (like Yohan in Japan) or to open a bank account (Mexico, Colombia, most places). So in such places you would have to rent and/or suckle regularly at the ATM-cash-tit, as I do here in Mexico. Or you could put stuff in your lady's name, like OutWest. Actually to me that is the most PT/Alpha/RoadWarrior move possible. No legal presence, hard to hit, bugout-bag always packed.

"Don't get fooled again!"
--Peter Townshend


But as you put down roots and have kids, that stuff changes. Being a loner loses its alleur. You become Beta as hell, a fighting Beta. You need local rights, and unless you're located in Belize or a pricey tax haven, that long-term legal stay and local family is going to mean laying down the suitcase and getting legal.

There was a time when I was proud to pay taxes.
:shock:
Perhaps that day could come again.

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eurobrat
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Post by eurobrat » September 2nd, 2014, 1:12 am

Jester wrote:
eurobrat wrote:
Jester wrote: But I've analyzed it, and it doesnt make sense to renounce unless you're up in six figures.

Rock's point about investors is well-made. Investors don't get the FEI exemption.

So here's a question for Rock:
Among the tax-treaty countries, more or less the Anglo and Euro OECD-type countries plus maybe a few others, there are provisions to avoid double tax. Do these provisions generally apply to dividends and rents etc?
With 2 passports, why even bother telling them you're overseas if you're making your money off investments?
Probably true in most cases....

But some places you need legal residency to buy real estate (like Yohan in Japan) or to open a bank account (Mexico, Colombia, most places). So in such places you would have to rent and/or suckle regularly at the ATM-cash-tit, as I do here in Mexico. Or you could put stuff in your lady's name, like OutWest. Actually to me that is the most PT/Alpha/RoadWarrior move possible. No legal presence, hard to hit, bugout-bag always packed.

"Don't get fooled again!"
--Peter Townshend


But as you put down roots and have kids, that stuff changes. Being a loner loses its alleur. You become Beta as hell, a fighting Beta. You need local rights, and unless you're located in Belize or a pricey tax haven, that long-term legal stay and local family is going to mean laying down the suitcase and getting legal.

There was a time when I was proud to pay taxes.
:shock:
Perhaps that day could come again.
You can have legal residency with two passports, I have residency in Berlin.

Jester
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Post by Jester » September 2nd, 2014, 1:28 am

eurobrat wrote:
You can have legal residency with two passports, I have residency in Berlin.
Gotcha. And if income goes into your US account, then cool.

But if you earn locally, or deposit your pay into a local account, you will face "tax residency" as well.

Some places notice regular deposits into a local account, even from a foreign source, and will want to know if you are earning money while living there.

It's not a big deal, perhaps, because taxes in Germany on the self-employed are reasonably low.

But your case is unique. You received your Euro passport by right of blood. Most of us are not in that position. If you had gone to Germany and established residency based on online income, you would be proudly paying German taxes.

And IMO, if you like the place, that wouldn't be the end of the world.

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eurobrat
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Post by eurobrat » September 2nd, 2014, 1:30 am

Jester wrote:
eurobrat wrote:
You can have legal residency with two passports, I have residency in Berlin.
Gotcha. And if income goes into your US account, then cool.

But if you earn locally, or deposit your pay into a local account, you will face "tax residency" as well.

Some places notice regular deposits into a local account, even from a foreign source, and will want to know if you are earning money while living there.

It's not a big deal, perhaps, because taxes in Germany on the self-employed are reasonably low.

But your case is unique. You received your Euro passport by right of blood. Most of us are not in that position. If you had gone to Germany and established residency based on online income, you would be proudly paying German taxes.

And IMO, if you like the place, that wouldn't be the end of the world.
True, but the point of two passports is to take advantage of both places. You're essentially two people...

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eurobrat
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Post by eurobrat » September 2nd, 2014, 1:32 am

Jester wrote:And IMO, if you like the place, that wouldn't be the end of the world.
http://en.wikipedia.org/wiki/Armenian_nationality_law

It's time for you to come home Jester :lol:

Rock
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Post by Rock » September 3rd, 2014, 3:54 pm

Jester wrote:
So here's a question for Rock:
Among the tax-treaty countries, more or less the Anglo and Euro OECD-type countries plus maybe a few others, there are provisions to avoid double tax. Do these provisions generally apply to dividends and rents etc?
Yes! You are credited for any taxes with-held by or paid to a foreign government on dividends, interest, rents, etc. If you use the Turbo Tax software to prepare your returns, you will even be prompted with specific questions and blanks where you can enter those taxes paid. I've never seen a case where you get double taxed (i.e. no credit from IRS for what you already paid to a foreign country). That should even apply to countries where no such tax treaties are in place such as Taiwan.

Jester
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Post by Jester » September 3rd, 2014, 6:34 pm

Rock wrote:
Jester wrote:
So here's a question for Rock:
Among the tax-treaty countries, more or less the Anglo and Euro OECD-type countries plus maybe a few others, there are provisions to avoid double tax. Do these provisions generally apply to dividends and rents etc?
Yes! You are credited for any taxes with-held by or paid to a foreign government on dividends, interest, rents, etc. If you use the Turbo Tax software to prepare your returns, you will even be prompted with specific questions and blanks where you can enter those taxes paid. I've never seen a case where you get double taxed (i.e. no credit from IRS for what you already paid to a foreign country). That should even apply to countries where no such tax treaties are in place such as Taiwan.
+10

Once again, the BEST SOURCE FOR INFORMATION ON EXPAT-ING IS HAPPIER ABROAD!!

This information is available on NO other forum or expat site or EVEN ON ANY BIG ACCOUNTING FIRM WEBSITE anywhere in the internet universe.

PS Obviously, newbs, you NEED TO BOUNCE THIS OFF YOUR TAX ADVISER. The point is, if you just read non-HA sources, you wouldn't know to even TRY the other countries.

Repatriate
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Post by Repatriate » September 3rd, 2014, 7:50 pm

The foreign tax credit isn't exactly breaking news. If you hold an international stock index you'll see a clear exemption for it.

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