As a former US Diplomat, the author should know that the first $80K or so are treated as tax exempt. Poor, poor baby.

Germany doesn't tax that money unless he sends it back to Germany. The US is literally the only country that does that.

Mr. Knowitall thinks it's all about paying taxes.

BTW I had no idea you were overseas. Can you please drop by this thread and introduce yourself?

http://www.democraticunderground.com/1009350

Thanks,

David

I do think you're overlooking S-corp income here, btw.

The "flow-through" concept is hard for them to grasp. My outfit has some, which I never even knew, and so the Germans are trying to tax me on income I never received, which is putting me in the close to 100% tax bracket. The Germans are adopting their usual "I never heard of it, so it doesn't exist" attitude, and the accountants and the government are fighting it out. As I cannot live on 0% of my gross income, I will have to move down to Switzerland if they keep this up. My wife would hate to leave Germany, but she is retired and gets about €800 a month pension, and we can't live on that, either.

stash money overseas and bring it back in every few years when they issue amnesties

But that is not the issue. The issue has NOTHING to do with paying taxes. It has to do with the asset reporting requirements. If you have more than $10,000 in your account you have to file paperwork under FACTA, if you have over $50,000 in your account you have to file both FACTA and FBAR. This isn't paperwork that most filers can do, it has to be done by a tax accountant that knows what they are doing. If you make a mistake the penalty is $10,000.

So please tell me again that you even know what you are talking back?

Is there is a better way to do so? I agree, the regulations seem quite cumbersome.

I earn a nice salary, but it certainly isn't that much (it would be upper middle class in the US). We live comfortably and I save money. The regulations under FACTA and FBAR snare people who it really shouldn't. That has caused people to renounce their citizenship because of the tax implications and the fact that if the reporting is not done currently there are huge fines. The reporting is complex and the US Government is able to find out just how much is in my Korean bank account because the banks are required to report it. It's really fucked up. The Democrats Abroad Committee is working to push for revisions, but god knows when Congress will do it.

I went over this year and am going to have to file for one, but not the other (I'll have to file for the lower one). I'm doing it this year, but will be making sure I keep my account under $10k. One way is to send money back to my US account. The other is a safe. Another would to be throw some of it at my mortgage. I could use a combination of those as well. I'm certainly not Al Capone rich.

BTW are you living abroad?

Obviously there is problem with some hiding their monies overseas but I don't think anyone wants to penalize Americans living abroad either. What steps are being considered to alter the situation?

who has become kind of our defacto DA representative and there was a committee that made recommendations. Last I heard there is legislation that is being introduced to revise the law and there is even a Republican co-sponsor. However, with Congress controlled by the Republicans and the House leadership in shambles, who knows whether it will even come up for a vote before this session ends 15 months from now. If not, then it has to be reintroduced and go through the process again.

I will look it up

Its mirror image is that visitors to the US have to disclose ridiculous financial and personal information. I know a friend from the UK who is a plain but distinguished university science professor, normally exactly the kind of visitor America would want, who will not come to visit because of this nonsense.

As the article states, the US is the only country in the world that extends its laws beyond its borders in these ways. There are other laws too that have similar extensions. American 'exceptionalism' again, as yet more American imperialism.

But in this case it is also yet more laws that have the effect of considering Americans guilty until they can prove they are innocent. It does this by placing a tremendous paperwork burden on them.

I'll have to ask my coworkers who is from the UK. It is quite maddening that we have to go through so much crap. I have chosen Korea as my permanent home and don't want Korean citizenship (though I could qualify if my language skills improved), so I have to live with it until the law can be revised.

BTW are you an expat??

I had to move a bunch of money over here just to pay my German taxes, so there will be no avoiding the complicated forms. I could qualify for German citizenship, but don't want it, either. They did tell me, when I applied for residence, that I didn't need a language test (asked if I had been born in Germany!).

The five hundred Romneys out there, if it is that many, make the paperwork hell for 6 million Americans living overseas, because the other 5,999,500 of us are not trying to hide fortunes offshore.

Hell, now an American living in Japan can't even buy freaking life insurance from a local provider without having to fill out a bunch of forms that only Americans have to fill out.

The majority of us comply, have complied, and always will.

It's like the d*** TSA scrutiny that we all get when we fly.

I believe that you mean FATCA rather than FACTA. https://www.irs.gov/Businesses/Corporations/Foreign-Account-Tax-Compliance-Act-FATCA It is the one for which the magic number is higher.


https://en.wikipedia.org/wiki/Foreign_Account_Tax_Compliance_Act

FATCA is the revenue-raising portion of the 2010 jobs stimulus bill and is thus a good thing, IMO.

FBAR is the one that applies uniquely to bank accounts and applies when the aggregate total of foreign bank accounts is >USD 10,000. https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Report-of-Foreign-Bank-and-Financial-Accounts-FBAR

FBAR is no big deal, IMO. It's just a report that can be filled out on-line, printed, signed and sent to the IRS. It takes a few minutes and certainly does not require a tax accountant. I've done my own for years.

Now that I am a retiree, I have no financial assets abroad that >USD 50,000. My major financial accounts are held in the US, so the IRS already knows everything that there is to know.

When I first moved to Switzerland in 1994, I became a client of then-SBS (now UBS), which is an international bank with an international as well as local clientele. UBS was one of the notorious ones that got caught for helping US citizens (here and in the US, btw) to hide their financial assets from IRS scrutiny and got its fingers badly burned. (I never had enough financial assets to be involved in any of this skulduggery, LOL.) However, what UBS has done since then is to combine its US expat clientele for administration directly from its head office in Zurich so that it meets all of its tax treaty obligations for IRS purposes.

The problems caused by FATCA are not with the major international banks, at least not in Switzerland, but rather with the smaller cantonal banks. They don't generally have the resources to ensure that they will be in compliance with US reporting requirements and thus take the path of least resistance. So yes, the cantonal banks as a rule refuse US nationals as clients based on nationality alone. And yes, I know personally ex-US citizens who have specifically repudiated their US nationality for that reason. However, they would likely not have had the same result with one of the big internationals such as UBS or Credit Suisse, which have branches all over the country - and the world.

No one should necessarily condemn anyone out of hand for their actions, IMO. In most cases I know, the individuals were US citizens by birth who had spent the majority - if not all - of their lives living outside the US, had few, if any, ties there, and had a second nationality.

IMO, FBAR is not a prob at all - just a few minutes spent on line after verifying the highest account balance(s) during the tax year. FATCA does not apply to me at all.

Now everything is done on line. I keep forgetting that until I actually go on line to complete the blasted form. Senior moments!

Last year, I made a mistake - had a typo where I inverted some digits - and still managed to get the matter clarified, all on-line. The I-net really is an amazing contraption.

The fine for a mistake on those are $10,000 from what I've heard.

I'm purposely keeping my account under $10,000 this year to avoid having to do it. Last year it went above $10,000 for a month so I guess I'm stuck doing it for last year.

All because of this.

Boris Johnson says he intends to renounce his American citizenship to prove his "commitment to Britain".

He told the Sunday Times that his citizenship was "an accident of birth that has left me with this thing. I've got to find a way of sorting it out."

The Mayor of London, who was born in New York, has in the past been forced to pay US tax because of his American citizenship.

He has just completed a six-day tour of cities in the US.

Mr Johnson said he would approach US ambassador Matthew Barzun to explore what steps he had to take to give up his American nationality.




The Conservative politician - who was born in Manhattan in 1964 and holds a US passport alongside a British one - said that relinquishing his citizenship was a "laborious business, they don't make it easy for you".

Tax bill

His passport was renewed in November 2012 but he had previously stated that he would give it up after being told in 2006 that, as a native born American, he could only use a US passport to travel in that country, and not his British one.

"The reason I'm thinking I probably will want to make a change is that my commitment is, and always has been, to Britain," he said.

In January he settled a US tax bill he had previously described as "absolutely outrageous".

Mr Johnson had faced a demand from the US authorities to pay capital gains tax on profits from the sale of his house in north London.

American law requires all citizens to pay US taxes even if they live abroad.

http://www.bbc.co.uk/news/uk-31475945

Still not many people born in a foreign country become politicians in another. Here in Korea there is a Filipino woman who has dual citizenship that is in the National Assembly. She however was not directly elected, but is part of the majorities appointed seats.

I'm no fan of Boris Johnson but I think if that was the case he would have done it before entering politics. I think he's upset about an extra tax bill, which he only owes because of his dual citizenship, that and not being allowed to use his British passport to travel to the US.

I know very little about him. The dual citizenship thing is complex. I am an American living in South Korea and I could (if I mastered the language) take a few courses and get Korean citizenship. Since I have no kids, I don't see any reason to.

No Democratic candidate has advocated reform in the way we tax Americans abroad. Because of unclear clauses in the double taxation treaties between the USA and Germany, between the IRS and the German Finanzamt, I am currently looking at an effective 90+% income tax for 2015--not marginal, but total. All but something like 3 countries allow residency-based taxation. The USA is one of those 3. The first candidate that advocates bringing the USA in line with the rest of the world gets my endorsement--except that none of them will. The USA expects us to spread good will, represent the USA abroad, help out businesses based in the USA, and increase commerce. And then it expects us Americans doing that to pay for the privilege.

I agree with you that it's doubtful any of the three will address the issue in the campaign itself. Probably the one I'd suspect (and I know there is bias in my answer, so take it with a heap of salt) is Bernie Sanders. If we could find a way to get a message to his campaign I'm sure he would address it which would cause the other two to have to chime in. I'm not politically connected and a total outsider. The other issue (unrelated to this) that I'd like him to address more is student loan debt.

It got out of hand, just like the mortgage debacle, and I think they all know some form of relief is called for.

As for taxation of Americans residing abroad, my unbiased opinion is that Bernie would be the least inclined to listen to us. It wouldn't fit in with his message, which, as his supporters accurately claim, has not wavered in decades. The nastier of his supporters (which, I'm sad to say, seem to constitute the majority) seem to think that every American residing abroad is only doing so to hide ill-gotten billions from paying their "fayah shayah." Katrina of The Nation knows that's not true, as does Jim Dean, but they won't have a say in his stances. Hillary, as a former SoS, should at least be receptive to the reason for a necessity for reform. However, so far she hasn't wasted a word on us, and therefore has no more claim to my endorsement than either of the other two. If she is elected, and if she retains Howard, then I WILL have a conduit in there, and can maybe budge the boulder a bit.

We Americans residing abroad may even include a billionaire or two hiding offshore money, but the other 6 million of us are not doing anything of the sort, and we constitute a bloc more populous than at least 30 of the individual States. You'd think SOMEONE would listen!

Most of us don't earn enough to have to pay taxes because we are under the 100,000 cap. I think that should be the exception for filing the extra paperwork. I mean I have a decent job and make a decent living and should not have to worry whether my bank account gets above either the 10k or 50k limits (which really need to be raised to 100k and 500k), but I do. I have resorted to taking money out and using a safe at home until they fix this damn thing. I don't have the time or money to file the extra paperwork. So in a way I am technically breaking the law.

I think there are a lot of people out there that are misinformed about expatriates and why we live where we do. Certainly if I heard that from a Sanders supporter I'd start out by letting them know I only earn 40k a year and am not super rich. Because the cost of living is so low, it allows me to be frugal and save (something every family should be able to do, but aren't since most don't make enough money). Many of us also pay more taxes abroad to the country we live in because we have such great health care. I pay income tax, sales tax (on almost everything), a car registration tax, property tax (which is actually pretty low), and transaction taxes for whenever a car or house is sold or bought (I'm sure Germany is similar in that regard).

I have heard no such noises from any of them.

I hate the paperwork, but pay others to do it. Curiously, the Germans allow me to deduct those costs, The Americans do not. I am in the worst case scenario on health care. Since my employer and payout is in Texas, I enjoy zero health insurance from the Germans despite my max tax bracket. I checked out a quote from the "private" insurers here, and they said €2500 a month. That's $33,000 a year!! So I stick with my American Blue Cross and hope they are willing to reimburse my medical expenses abroad (the answer is usually no). Germany's health care is fine, but I have to pay for everything out of pocket. My wife is German, but took early retirement at age 60, so I pay €400 a month for her health insurance until she hits 65, when German Medicare kicks in. I make a gross of way more than $40,000, but still have a family and a house to maintain, and the cost of living in Germany is expensive. House transaction taxes run about 6% total, cars are full boat at 19%. If I were to start draining my savings and cash in my IRA (tax paid in the USA, but the Germans want the other half if I cash it in). I could supplement the 9% left over for a few years, but then be penniless at age 69. Either the Germans stop acting like "Enteignung" is still standard policy, or the USA adopts residence-based taxation, or I'll have to move, which would break my wife's heart. My bet is that options 1 or 3 are far more likely to happen before we join the rest of the world. Luckily, Holland is only 120 km from here, and Switzerland less than an hour by air.

Most people haven't the slightest idea why we live where we do, or what it is that brought us where we are. And if they can't be bothered to ask, then to them we are just privileged whining rich people because we live someplace they have only read about, and think we are all on extended luxury vacations. Republicans don't have a monopoly on ignorance.

Which causes more problems. I guess worst comes to worst I take all my money and throw it at my mortgage.

Throw one headache at another and hope they cancel each other out

There are some great Dem advocates here.

Her mom is still alive and well in a tiny town in northwestern Germany. She is the only surviving grandparent of our girls, and my wife is her only surviving child. At 88, she can't move. Plus all my wife' friends are now in our area, many within a few meters of where we live. She has been living full time in our little town north of Düsseldorf for half her life now. It's a town both our children have always considered their first home. I would have nothing against moving away from the German and EU bureaucracy, but I can't ask her to give her life up just like that. Should that change, I will polish up my Schwyzerdüütsch and after 40 years of occasional visits for work, I can already handle most of it, though don't ask me to be fluent in Uri or Appenzell Mundart just yet!

It sounds like you have a lot to stay for.

Have to say that my own Schwyzerdüütsch is extremely sparse. French is the main language where we are. When we travel to the German-speaking area, most people are happy to speak to us in English. Of course, that's usually in the larger cities.

Since I am in Paris and Brussels once a week for work, and on the phone with Genève almost every day, French is almost second nature to me by now.

I'd rather not move, but I can't live on 9% of my gross income.

for a couple around your age. Many of them are twice or even three times that. Seriously.

https://www.insidehighered.com/news/2015/02/06/european-university-association-raises-concerns-about-possible-trade-deals

https://americansabroad.org/ There are lots of good tips there.

I had the privilege of knowing the late Andy Sundberg, the founder of American Citizens Abroad. http://www.swissinfo.ch/eng/american-citizens-abroad-founder-dies/33422364



Andy Sundberg was also a very staunch Democrat.