Becoming an Expat

quote:

Again, Travis and I both lived in states without income taxes, so we're fine. Sounds like the rest of you are screwed, however. (Of course, I'm sure you're all smart enough to evade state tax authorities.)

Nah...I edited an above post with a list of 'good states' and 'bad states'. the rest are in between, but mostly good. E.g.: unless you have property, they don't care, and even then they honor FEIE

Mississippi looks bad.

The state section of this book is very thin, compared to the rest of the book. And it is 5 years old. I must belatedly qualify everything I said dated, simplistic, derived, and not from a tax pro

The moral of the story is to make sure you know your state's individual rules and how they apply to your individual situation.

PS: We have an abroad forum here! We talk tax there from time to time./

quote:

Originally posted by Stoo:
PS: We have an abroad forum here! We talk tax there from time to time./

That's all about working abroad. What about those of us who just sit in the sun and sip grappa all day. Surely we deserve a place here on Bna. What happens when you move to Milan and take up a life of carousing and cafe hopping?

I've brought up the topic here, recommending changing the largely unused Beyond Backpacking forum to an Expat forum.

Well, I throw in some stuff on California. From my notes:

California is unlikely to care if you never return. However, if you do return they are going to look at the following while you were gone:

- Location of your spouse and children
- Location of your principal residence
- Where your driver’s license was issued
- Where your vehicles are registered
- Where you maintain your professional licenses
- Where you are registered to vote
- Location of the banks where you maintain accounts
- Location of your doctors, dentists, accountants, and attorneys
- Location of the church, temple or mosque, professional associations, or social and country clubs of which you are a member
- Location of your real property and investments
- permanence of your work assignments in California (for an employer-related contract; absence must exceed 546 days to be considered a not temporary and not a resident)
- Location of your social ties
- where you own or run your main business

the more of these things you've maintained in California while you were gone, the more likely they are going to determine your intention was only to leave California temporarily and owe them taxes for those years.

Now, is CA really going to call you on it. I don't know.

quote:

Holy shitstorm of info. You guys are being waaaay generous.

No kidding! I may never have to read another book on this subject! The info just keeps pouring in! Keep it up everyone!

I am an expat in NZ - very easy for English speakers to live and work here, great lifestyle as well!

Continental OP/Stoo,

Correct me if I'm wrong, but are you not only obligated to pay USA taxes if you receive money/profit from USA securities or nationals. For example you are not obligated to file taxes on Swiss Bank Accounts if the bank invests in USA stock markets. If you direct your account to 'not profit' from USA related holdings, then your money has nothing to with the USA and therefore the USA cannot tax it.

As for opening an LLC, S Corp, C Corp....again correct me if I'm wrong. Don't the rules about what the USA can tax change dramitically if you incorporate...let's say in the Caymans or Mexico? Not only is this cheaper, but it also goes a long way to showing where your tax home is....

Thoughts?

quote:

Originally posted by Slip:
As for opening an LLC, S Corp, C Corp....again correct me if I'm wrong. Don't the rules about what the USA can tax change dramitically if you incorporate...let's say in the Caymans or Mexico?

It depends. There are pros and cons to operating as a foreign corporation. They vary depending on a.) where your source of income is coming from, b.) where you are living, and c.) where your money is going.

I found working as a foreign corporation complicated things for me. I live in Italy, but most of my income comes from various sources outside of Italy. Little of it comes from the U.S.. If I was doing business in Italy as a corporation (be it Mexican or otherwise) I would need to register said business and would be subject to Italian taxes, even if I had no Italian clients and no Italian source of income. And if I was doing business in Italy as a U.S. corporation, as a U.S. citizen, I'd have to pay taxes to the U.S. on all income earned while overseas. As a self-employed contractor, however, I pay no Italian taxes. Nor do I pay U.S. taxes for the first $80k earned each year (at least half of which is stored in U.S. banks, but it remains untaxable as the U.S. considers Italy my tax home no matter where I store my money.)

The experiences of Stoo and others may differ.

Note to readers: I am not a U.S. tax authority. As Stoo and others have mentioned previously, see a professional tax attorney in your state for assistance in such matters. In the interim, regard the above post with a healthy amount of incredulity.

quote:

Originally posted by Sophie9:
I've been an expatella in Russia for 4 years and next year we're probably moving to China....

I have mixed feelings about living overseas, but surely the biggest issue with living in a foreign country are the language problems. I've gotten to where I can speak some Russian and comprehend a lot of what I see and hear, but for sure I miss A LOT of details and innuendo. I haven't seen an American newspaper in years, English language books are almost impossible to find, maps are all in a foreign language, train schedules are impossible to decipher, dentist appts. are a nightmare, bureaucratic foreign paperwork is never ending, every daily task is a struggle. It wears on you.

I can absolutely assure you that traveling to a foreign country and living in a foreign country are two entirely different things.

And after 4 years it never occurred to you to learn the damn language? I can't stand immigrants that don't know the language in the US, and I hold myself and others to the same standards.

Shameful...

Chelovek,

Please refrain from directed attacks. They are against the posting guidelines and grounds for being suspended. Please address the concept and not the person.

Thank you,
Slip

I am a dual Israeli/American so I have been living that lifestyle all my life. I currently live fulltime in the Philippines, but wish it were Cambodia, which I visit every so often.

The advantages? Money. The Philippines are the most expensive nation in SE Asia, and I am still able to live like a king.

The average wage in my part of the country is 3 dollars US (bit more with the exhcnage as it is currently) PER DAY.This country makes it conducive for expat retirement with all kinds of incentives, SS benefits are deposited directly,although for myself it is a non-issue at age 40.

Countries like Cambodia are even more attractive with Guesthouse rooms starting at 1 US dolar a day (although most are 2). Food there is less than 5 per day if you eat as a local, and so on.

Another advantage is seeing the world, learning about different lifestyles and perspectives.

Disadvatanges? Politics makes it dangerous at times. I live on Mindanao and we have 6 insurrections at the moment with one heating up 12 klicks from my home (gunships and mines, thousands of refugees).

If you look foreign, as I do, it creates real security concerns but the situation is different even in different parts of this nation, let alone in other nations.

Homesickness kicks in as well. Just trying to find dairly products in this part of the world can be maddening. Most SE Asians lack the enzyme needed to digest it and so it is not sold widely.

Healthcare is VERY dodgy to say the least. In this country, you better pray if you are in pain because that is as close to analgesia as you will get (outside of ultram or paracetemol). To even see a doctor requires a cash outlay even in dire emergencies .

Driving is hell, but that can be the cae in NYC so it is all about managing perspectives.

For me the defining issue was family. I married a local owman and we have buisnesses here so it is not much of a choice.

quote:

Originally posted by Slip:
Continental OP/Stoo,

Correct me if I'm wrong, but are you not only obligated to pay USA taxes if you receive money/profit from USA securities or nationals. For example you are not obligated to file taxes on Swiss Bank Accounts if the bank invests in USA stock markets. If you direct your account to 'not profit' from USA related holdings, then your money has nothing to with the USA and therefore the USA cannot tax it.

I am sooo sorry for being soooooo late on this. I just turned the thread notifications on, so never again

The Answer: Sorta.

If the income is a salary, then it does not matter where it comes from if you are a 2555 qualified foreign resident. If the income is non-salary, then tough cookies. 2555 plays no roll here, but there may be other little magic tax things to help you out, like the Foreign Tax Credit. The IRS defines what is salary and what is not. E.g.: Foreign unemployment benefits are not salary, and hence are taxed as capital gains. Same with rental income, profit from the sale of property, alimony, dividends, lotto, etc. All of those non-salary income streams, regardless of the nationality, are taxable and should end up on the 1040.

I've been in Peru for four years and get citizenship in Nov. I started with a bad salary, but worked my way up to a chush job at an international school.

I have pension, we just bought a flat, cash, a SUV cash as well. It depends how you plan and save.

This whole thread is a good example of "analysis paralysis". Hire a good CPA and it tends to be far simpler than you might think.

I am legally an Arizona resident though I haven't lived there since 1989. Paid taxes there only once since then, and that was when I sold a condo for a nice profit a few years back.

Hasn't been much said here about Malaysia.
I retired here in 1995 and for 8 years, used the 3 month social visa, got 3 month extension, then took short trips to Thai or Sing border, home to Australia to see my kids etc, then doing it all over again.
Eventually, in 2002 (i think), i got the MM2H program which requires US$41 fixed deposit or US$3,000 per month income.
Bought a house and haven't left since (except for travelling the world occasionally.

Malaysia is, in my opinion, the best country in the world to be an expat.
You need -
political stability, currency/economic stability, low costs, ability to insure, borrow, buy property, minimal crime, minimal social dis-harmony, easy accessability, english language.
I can' think of anywhere else in the world that meets all those.

US$500 upwards per month to live comfortably.

Stay with us for a month to try it out. We have 2 spare rooms since our daughter has grown up.

cheers all
greg
Seremban
Malaysia

I never chose to be an "expat" and actually resisted being identified as an expat for many many years after living abroad in Europe, Hong Kong and most of the time in the Philippines. So sometimes it's NOT a all of a sudden , "I'm not satisfied with my life here int his country or specific location" type of decision. It has alot to do with one's focus in living their life, mine was "adventure" and "Learning". From the age of 10 to 12 when the teachers and counselors start the "what do want to be when you grow up" lines of questioning I never did find the answer and I'm 56 y.o. now. I DID start by KNOWING what I KNEW I did NOT want to do which is a long line of common careers and professions. So being self-employed and good with "the gift of gab" I ended up escaping from the 9 to 5 job lifestyle and appreciate the FREEDOM almost each and everyday I wake up. Maybe around 40+ after we'd taken our daughter back to Santa Cruz , CA aka "surf city" or "hippy heaven" for education I realized that I WAS and AM an EXPAT about 20 years after leaving the States.

Opportunities has alot to do with the choices we make so Good Luck develop a GO FOR IT attitude when you leave home.