Have any of you done this?
I did pay taxes on U.S. property holdings, though.
I did for a lesser amount decades ago.
I was living in Yemen for 5 years in 1993 and early 1994.
No, that wasn’t a typo.
you have to live outside the country for 11+ months to take advantage of the deduction
of course, there’s the whole “paying taxes to a country where you’re not living” issue... something only the US believes its due (and some small dot of a country).
king george never thought of anything so invasive
As a long time expat let me tell you this is a nightmare
You still have to fill the mountains of US tax documents.
Second when you do return to the US you WILL BE audited and you WILL be found to have improperly filed the returns while living overseas. The tax code is very specific if you live overseas you are assumed to be a tax cheat.
The real question should be: If you live and work outside the US and do not spend more than 30 days inside the US why do you still owe US taxes at all?
If Obama would have the US tax code redone so that the US taxed on residency (Like the rest of the world)rather than citizenship, as much as I hate him, I’d consider voting for him for a third term. The US tax laws for expats are simply evil.
So please don’t think it is any kind of break in your taxes
At the end of that article, it links to another article that describes in what circumstances you can avoid (legally) paying taxes in on the $100,000+ in any country:
I lived in Hong Kong and Taiwan for 13 years.
back then, the Foreign Earned Income Exclusion was about $95,000.
Its part of the reason I’m a conservative now. Hong Kong had a 15% flat tax, and your taxes were calculated on a postage card. There were no deductions except for children only, and was the same for corporations, so its simplicity meant NO corruption of people gaming a complex tax regime.
The other thing - when the US Gov’t and states are taking 50% of your income to support awful social-engineering schemes and the nanny states, its actually easy for someone working hard to build real wealth.
There were 2 ways to qualify.
The physical presence test requires at least 330 full days outside the US in a 12-month period.
The bonafide residence test requires being a resident of other country for at least a full calendar year. The regs specifically say that this term is not defined, but basically means that's where you live and reside and not the US. A key factor is that you don't have a specific date to return to the US, which in my case kept going on and on for 6 years. Another is that you have indicators of residence, such as a local ID, phone number, etc. I also made sure that my plane tickets originated from the other country to the US (which were cheaper anyway and gave a free stopover). If it's done this way, then you are not limited to the few days of the physical presence test. You do have to list the days you are in the US, and pro-rate income to the US as appropriate.
I also recall the way the tax was figured changed about 2006. Before that the income was reduced. After that the reduction was figured some other way that gave a lower tax reduction.
Despite what another poster said, I was never audited.
Also note that as the article pointed out, the Earned Income Exclusion is for income tax purposes only, and you are still liable for both sides of the social security tax.
With all due respect to mom & pop, please consider the following.
As a consequence of the parents of expatriates not making sure that their children were taught about the federal governments constitutionally limited powers the way that the Founding States had intended for those power to be understood, their grown-up expatriate children are not able to argue the following point about taxes to make living in the USA more affordable.
From a related thread . . .
A previous generation of state sovereignty-respecting justices had clarified that Congress is prohibited from laying taxes in the name of state power issues, essentially any issue that Congress cannot justify under its constitutional Article I, Section 8-limited powers. This is evidenced by the excerpt below.
”Congress is not empowered to tax for those purposes which are within the exclusive province of the States.” - Justice John Marshall, Gibbons v. Ogden, 1824.
In fact, based on the Courts statement above, here is a rough approximation of how much taxpayers should be paying Congress annually to perform its Section 8-limited power duties.
Given that the plurality of clauses in Section 8 deal with defense, and given that the Department of Defense budget for 2015 was $500+ billion, I will generously round up the $500+ billion figure to $1 trillion (but probably much less) as the annual price tag of the federal government to the taxpayers.
In other words, the corrupt media, including Obama guard dog Fx News, should not be reporting multi-trillion dollar annual federal budgets without mentioning the Supreme Courts clarification of Congresss limited power to appropriate taxes in budget discussions.
Remember in November !
When patriots elect Trump, or whatever conservative they elect, they need to also elect a new, state sovereignty-respecting Congress that will work within its Section 8-limited powers to support the new president.
Also consider that such a Congress would probably be more willing to fire state sovereignty-ignoring activist justices.
There are about 190 countries in the world, and for a short time the only countries requiring expat tax filing was Libya and the USA.
Now it:s only the USA. More;
Bankers used to LOVE Americans. But then the IRS went after the Swiss for their banking secrecy, and now if overseas banks don:t report holdings by Americans they can face a THIRTY PERCENT tax on EVERY one of their transactions that flowed through ANY US bank.
This means overseas banks all regard Americans as having the Ebola virus —they simply don:t want to deal with the demands, threats by the dictatorial US government.
It is basically an electronic Berlin Wall.
On the privelige side there is nothing to being an American, while on the responsibility side the burden is cruishing.
THE OPPOSITE OF WHAT IT USED TO BE.
Just got done working in the Middle East for 2 years. Not only did I get that tax break, my employer payed the rest of the taxes I owed.....
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