JimGant

2 hours ago, MeePeeMai said:

Have a look at this link (for example)

Irrelevant. Wife is US citizen.

2 hours ago, MeePeeMai said:

I could be wrong about this one but I don't believe that your wife can inherent your IRA (as a beneficiary) or any other probate free assets in the USA until your Federal taxes are complete for your final year (and she'll need your death certificate).  It must be shown that there will be no final taxes due on your estate - "probate free" or not.

Again, wife is US citizen.

2 minutes ago, MeePeeMai said:

If any US citizen thinks that they over withheld or paid too much in estimated quarterly taxes, it is not up to that taxpayer to decide that.

Are you familiar with spreadsheets? I certainly have the data to project this year's taxes on my projected income; and how much withholding I need -- plus some extra withholding to cover non-1099 income, like my interest on Bangkok Bank savings account. When I set up my wife's W4, this will automatically increase with inflation, just as with new tax rates. Thus, that $400 buffer I've built in - using the the "extra withhold" on the W4-- will be self-adjusting.

The IRS will actually send you a IRS prepared tax return -- if their data from 1099s exceeds what they show from your withholding/estimated tax data. So, yeah, the the final authority on whether or not your withholding exceeded your tax bill -- is the IRS, as you say. I say: Most of us will have all the info needed to compare our future tax bill to our annual withholdings. And, thus, make sure the withholdings exceed that projected tax bill. And don't file, if you have a good reason not to.

2 minutes ago, MeePeeMai said:

Is this statement that you made True or FALSE?

True

12 minutes ago, MeePeeMai said:

But if you have any assets in the USA, your final tax return MUST be filed in order to finish the probate process there in the USA.

 

Plenty of assets in US -- all exempt from probate, as they're financial, and have designated beneficiaries (IRAs, insurance), or are Pay on Death (POD) -- Totten Trust.

Wife will already have a problem with my demise, as she's completely computer illiterate. Having her being able to avoid the tax problem -- should ameliorate  the situation somewhat.

17 minutes ago, MeePeeMai said:

You are still required to file your taxes even if you overpaid or will owe nothing after filing (unless you are in the under the IRS' poverty income threshold or some other exception i.e. a wounded VET on disability income etc.).

Or, you have over $400 in income from self employment; $108.28 of church wages, from a church that doesn't pay social security taxes. Yes, a few exceptions I ignored, as the target audience are US expats. Also, this position on no need to file, if no taxes owed, is fully vetted by the CPA organization I belong to.

2 hours ago, MeePeeMai said:

3 hours ago, Presnock said:

Not filing a tax return does not mean you're committing Tax Evasion,

 

In the USA it does.

Certainly it doesn't in the USA. If you've overwithheld, or paid estimated taxes over your final tax bill -- and thus owe no taxes -- you don't have to file a tax return. Period.

The wife's checklist when I croak is -- don't worry about filing a US tax return. Why? Because I've got it setup that she'll overwithhold by about $400 of what her tax bill would be, if she ever filed. Which she won't, 'cause she wouldn't have a clue how to do it; no CPAs here in Chiang Mai; just gathering 1099s online to give to the tax preparer would be impossible; and going to Bangkok, or even by mail, would cost in the neighborhood of $300-400. What a hassle. Just donate $400 to Uncle Sam, save yourself any hassle, and consider it a wash with any tax preparer fee.

So, unlike Thailand, where, even if you don't owe taxes you're supposed to file if assessable income is 120000 -- and there's a 2000 baht fine if you don't -- the US has no penalty, nor legal requirement, for you to file, if no taxes owed.

59 minutes ago, Sheryl said:

So if Thailand were to tax the foreign income of non-residents (i.e. people with non immigrant visas, which is most of us), this would be pretty unusual.

Don't confuse non immigrants with non residents, at least for tax purposes. All DTAs spell out how to define who's a resident for tax purposes. For us expats, that's being here over 180 days, cumulative, in a tax year.

3 hours ago, beammeup said:

Your stance is not popular because they are your opinions

...but extremely well thought out opinions -- which is the best we can go with, until further clarification from the govt.

2 hours ago, TallGuyJohninBKK said:

So when Thailand says they want to tax all income worldwide for Thailand residents, do they mean all undistributed earnings or only distributions from IRA accounts?

Only the distributions from your conventional IRA -- like your annual RMD. This is clearly labelled in the DTA, particularly in the Technical Explanation. They'll just be concerned with mirroring what's in your US 1040, as to what income they're interested in. And, yes, you'll get a one for one tax credit against your US taxes for the Thai taxes paid on this IRA distribution. Undistributed earnings are of no interest to Thailand, or the US, for taxation purposes.

Roth IRAs are an interesting scenario. The Thai US treaty doesn't mention them, because the treaty was signed before Roth came about. But look at the following from the latest OECD Model tax treaty (2017):

Quote

Notwithstanding subparagraph (a) of this paragraph, the amount of any such
pension or remuneration arising in a Contracting State that, when received, would be
exempt from taxation in that Contracting State if the beneficial owner were a resident
thereof shall be exempt from taxation in the Contracting State of which the beneficial
owner is a resident

 And this, from the US-UK DTA:

Quote

 The Technical Explanation states, “Thus, for example, a distribution from a U.S. ‘Roth IRA’ to a UK resident would be exempt from tax in the United Kingdom to the same extent the distribution would be exempt from tax in the United States if it were distributed to a U.S. resident.”

So, this is the current OECD feeling on Roth IRAs -- and should the Thai-US treaty be reaccomplished, this would certainly be in there. Sadly, we're stuck with the current treaty's ancient language.

What to do? This is what, in the CPA world, is called a grey area. But -- to not declare any Roth distribution as assessable income to Thailand -- seems ethical under the new criteria, and in accordance with more modern standards than when the existing treaty was written. Now, I've been warned to not give tax advice on this forum -- so, just say what I just mentioned was an observation.

That TRD would even be aware of the term "Roth" (which they wouldn't be if you didn't have to declare non assessable income somewhere). Even if they explored your 1040 tax return, Roth would not show up. So, forget anything about any Roth distributions, should you have taken any (no RMD here), as somehow being reportable assessable for Thai tax purposes.

2 hours ago, Mike Teavee said:

shared his findings from Sherrings who clarify the use of the word "May" as to mean they would be the only ones who would apply Tax..

Nope. "May" by itself means there's a primary and a secondary tax authority. "May only" means there's only an exclusive taxation authority. In US treaties, because of the savings clause, where there's an exclusive ("may only") taxation clause, like for private pensions, this evaporates into a "may" situation. Thus, IRAs and private pensions, in this situation, have Thailand as primary taxation authority, but with the US having secondary taxation rights.

18 hours ago, Mike Teavee said:

IIRC (It's been a few months since I looked at this), Thailand has primary taxing rights on UK Rental Income

Negative:

Quote

 Income from immovable property may be taxed in the Contracting State in which
such property is situated. [from uk thai treaty]

This language is similar to other DTAs -- the situs country has primary taxation rights, but the resident country has secondary taxation rights. ['may be taxed' is treaty language for there being a primary taxation authority, but also a secondary one. If it said 'may only be taxed, ' then there's only an exclusionary taxation authority, no secondary.]

So, submit tax returns to both countries -- with UK collecting all the taxes, and issuing a credit toward Thai taxes. If Thai taxes, after absorbing the UK tax credit, are positive -- well, you'll owe this delta, plus full fare to the UK.

18 hours ago, TallGuyJohninBKK said:

That said, if they really go thru with the current plan, it might well hasten us to both relocate back to my home country.  Too many unknowns right now, as usual....

John, what's the worst that could happen? You already pay taxes on your worldwide income. If Thailand will now exercise their right under the DTA to collect their share -- with a subsequent tax credit to be absorbed by the US -- your overall tax bill will be the same.

 I really don't think they wrote a tax treaty, that gave Thailand primary taxation rights on US income, but allowed avoidance of double taxation -- by allowing a credit of this taxation against US taxes -- but forgot to add a clause about "treating US income as foreign income" (re-sourcing) -- that resulted in negating the treaty's protection against double taxation.

Anyway, I'll take the tax credit. And if ever asked about it (1% chance, based on auditing data rates) -- I'm obviously equipped with enough narrative to put any auditor into: "Enough, OK."

Nice, intellectual discussion. That's about it.

3 hours ago, ThaiPauly said:

Are all these funds now vulnerable to taxation?

3 hours ago, ThaiPauly said:

 

Let's set the scenario. New worldwide taxation scheme replaces taxation of remitted income. It probably won't come into effect until, at the earliest, 2025. Come 2025, all your worldwide income in that tax year is subject to Thai taxation, as modified by DTAs. Thus, worry only about your tax year 2025 worldwide income. Monies already in Thailand pre 2025 are automatically savings -- only tax aspect here would be interest earned on these savings. Monies in your home country savings accounts pre 2025 are savings, thus no income tax angle (again, except for earnings within the account). What's new here is: foreign income earned in 2024, that was assessable and might be remitted to Thailand in 2025 or later -- would now be exempt from Thai taxation; whereby under the remitted law, it would be assessable income, subject to taxation, in any year remitted. 

So, if you currently have 2024 foreign income that you really need in Thailand, but know that if you remit it this year, or in any later year -- under the current rules, it will be subject to taxation. Now, if this new worldwide rule comes into effect in 2025 -- well, wait until 2025, or later, to send to Thailand. No taxation in this scenario.

Maybe the new rules ain't so bad, for those waiting with baited breath to send money across the border -- but can't afford the remittance based taxes. Serendipity, maybe?

1 hour ago, Sheryl said:

The biggest pitfall I can forsee is if the tax forms continue to have no way to show non-assessable income and you live mainly on same. 

First off, if I'm filing a tax return, I would have assessable income that exceeds the Thai standard deduction (TEDA) -- thus having taxable income. Otherwise, I wouldn't file. But you're saying you'd like Thai tax forms to have line items where I can put my non assessable income? What for? So the RD guy can argue with me on the fine points of my DTA, as to why it's not assessable? No way. I'd win the argument, at that level. No profit with this approach, just a waste of resources.

Now, for folks not filing tax returns, and who can be shown to have large cash flows into their Thai bank -- yeah, call them in for a chat on assessable vs non assessable income.

But line items for non assessable income, for the folks who actually file.....? Naaaa.

4 hours ago, lordgrinz said:

What do they want to see as acceptable proof of funds being savings only?

Under this new "forget the remittance BS," it will only be the current tax year (normally coinciding with the calendar year) whose intake of funds will be subject to income scrutiny. In the US, the IRS knows what most of this income is -- due to 1099's -- but other income, like self-employment income, relies on self-assessment, to a large extent. Same for tip and gambling winnings, as an example. For Thailand, maybe FATCA and CRS reporting will provide income figures. But, I wouldn't, at this stage, put too much faith on the completeness of this reporting. Thus, self-assessment will play a bigger role in Thailand for getting anything approaching a representative picture of income potentially subject to taxation.

So under this new worldwide system -- any monies you possess that existed prior to the current tax year -- are savings. Don't need a special law, when remittances aren't involved, to designate a previous year as a 'savings' portfolio.

21 minutes ago, spidermike007 said:

Many have significant overseas income that is not brought into Thailand. For these creeps to even consider attempting to tax that would be insanity and a bizarre over reach of power. 

But -- if you're a Yank -- you're already paying US taxes on that "significant overseas income." Thailand, going to worldwide taxation, is just going to now get a piece of the pie, per DTA -- and issue a credit to be absorbed by the US for those taxes Thailand is now collecting. For the Yank: In most cases, no change in total yearly taxes paid between both countries. For someone not paying taxes to home country -- well, welcome to the world of "you're going to pay someone," per OECD's guidance.

3 hours ago, MeePeeMai said:

Exactly which and what amount of relevant documents am I going to have to show to the Thai R.D. and just how are they possibly going to figure out this mess in a fair and equitable manner with regards to the tax amount due under the USA/Thai double taxation treaty?

Of course, your govt pensions and social security are strictly US business -- and need not be reported to TRD, as they're exclusively taxable by the US. IRAs, private pensions, annuities-- to name three -- are primarily taxable by Thailand. So, you just self-declare this income on your Thai tax return -- no official paperwork needed. And since Thailand is primary taxation authority, there's no credit due from the US: Thailand, as primary taxation authority, gets to keep all the taxes -- and issues a credit to the US to absorb. So there's NO US tax credit against Thai taxes.

On the US side, you don't need any official paperwork from TRD to take a credit against your US taxes -- you just do it, based on the numbers you derived from you Thai tax return. Since you don't have to file your US return until June, plenty of time to file a Thai tax return, and get the amount to credit. 

One other example -- rental income from a US property -- is a mix, with the US as primary taxation authority (but not exclusive taxation authority), and Thailand as secondary. In this scenario, if it's possible that Thailand would collect more taxes on this rental income than the US, then obviously they would want you to file a tax return. Probably, however, unlikely, if you're a middle class US taxpayer. In this situation, I'd just not file a Thai tax return (since the US credit would kill all Thai tax collection). No tax evasion, of course. And easily explained if ever audited.

Anyway, the credit game seems to be on way -- with Thailand issuing the credits. And not much paperwork involved, that I can see.

2 hours ago, spidermike007 said:

If this is indeed true, it seems like a major over reach, and rather draconian. I cannot see it being enforced. And if these govt. goons ever figured out a way to enforce it, the expat population would likely drop to 10,000. 

 

Over taxation is a device used by lazy minds who do not seem capable of running an economy. 

 

Are you talking about going from remittance taxation of worldwide income -- to just pure taxation of worldwide income? Very little, if any, difference -- unless somehow you could exist in Thailand without remitting any (or most) of your assessable income. I believe you're a Yank -- I'd really be interested in why you think the new worldwide income taxation will cost you any money? Thanx for your time.

2 hours ago, topt said:

Just so happens that Thailand not only moved the goal posts with the change announced last year but now are talking about moving the whole stadium..........(if it goes ahead)

Nice to finally see some forward thinking in the Thai govt. Finally being able to use the language in their DTAs with other countries (before, if the money wasn't remitted in same year, DTA language was worthless) to collect the taxes stipulated in the treaties -- is a nice, and necessary, touch. Particularly with the looming aging population problem. That I'll spend my last years here in a stable, and sufficiently financed, economy -- is reassuring.

And getting rid of the remittance loophole, and going to worldwide taxation, is really a no brainer -- for policy makers who have the country's well-being as their altruistic goal.

2 hours ago, MeePeeMai said:

My funds are currently co-mingled in my bank accounts in the USA.

 

Going to taxing just income, and not remitted income, means discerning which commingled funds are assessable income, and which are not, will no longer be an item, or a problem.

3 hours ago, MangoKorat said:

my take on it is that all that will change is that you won't be able to claim that the money you bring into Thailand was earned before 1 January 2024.

You miss the whole point on the new policy, which won't care about any money brought in -- only income earned in the current tax year, that per DTA, is taxable by Thailand. Nevertheless, all that money in your pre 2024 bank account is now savings, not current year income. Feel free to remit it, or not, as there's no longer a tax angle to it.