RE: That’s fine but you would still be obligated under US law to disclose your foreign bank account.
And that, my friend is the BIG REASON why rich expats have been giving up their US passports.
We are one of only two countries in the world that go after a person’s income anywhere in the world.... Eritrea is the other one.
A German citizen working in America and earning his salary here is NOT REQUIRED to pay taxes on his American salary in Germany.
An American earning his salary in Germany is REQUIRED to pay taxes in America on his German salary.
Also, if you had a bank account as a citizen of another country PRIOR to becoming an American Citizen, the interest you make on that bank account is NOW taxable in the USA.
Look, I am not saying I support the decisions of these expats.... all I’m saying is this — we have allowed our government and the IRS to be so powerful that their reach is now BEYOND America’s borders. I leave it to the rest of the readers of this thread to determine whether or not that’s a good thing for our country.
Being taxable and being taxed are two different scenarios.
Most Americans living overseas have to do a Tax return, however, after the income exclusion and the use of form 1115,(foreign tax credit) the taxes are virtually zero. You can take the foreign taxes paid to another Government as a direct credit against US taxes.
Since most European countries have higher taxes than the US, you have (in most cases)tax payments as excess. You can, as I have done, apply those overpayments as a credit in future years. That means after you return to the US and have to pay taxes, you can apply that towards your liability.
I agree
I had an opportunity to take an expat position in the Netherlands back in 2006, the primary reason I didn't take it was due to the tax complications of working in the Netherlands, and having to report my income to the U.S.
Further complicating my tax filings were property ownership, property rentals, and an interest in a U.S. based business for which I was part owner.
I really wanted to take the opportunity and move my family to Netherlands for two years but it was too complicated for me from a tax perspective. Shame, we could've seen some pretty parts of Europe on holidays.