Effects Of Address Change From Us To Thailand With Respect To Us Government

[funlovinkid]

I happen to be an American citizen who has been living in Thailand for the past 16 months or so. I'm at the point where I'm thinking of formally notifying the IRS of my new address in Thailand, but I'm wondering if doing so might change my status with the U.S. government, for better or worse. Does anyone have any knowledge of or experience with this?

Many thanks!

[Jingthing]

You should probably give more information. Do you work or own a business in Thailand and pay taxes here? Then you would be protected from double taxation. I filed my first return as an expat last year and made a point of using my Thai address. I don't work in Thailand, so the main reason I did this was to also file with my old state with my Thai address. I sent my old state a note with the return informing them that I no longer live there and don't intend to file state tax forms there anymore (they didn't reply to that either way). I am sure if you provide more details about your income situation, we have some US taxpats who can provide more expert guidance. Every state has their own policies on what they require to sever tax ties there, some are more difficult than others.

I assume you already know you are still required to file federal tax forms under the same requirements as a US resident. Also, if you have a foreign bank account over 10,000 for even one minute you must file a special form with the treasury department, if not, subject to very severe financial penalties.

Edited February 25, 2008 by Jingthing

[Siki]

What possible benefit would you gain by doing this?

Why would you involve yourself with the government if there is no benefit to you and there are some possible downsides?

You must file your taxes but do so from an address in the U.S.

It does not impress the staff of governmental agencies that you are now living overseas. It may, however, change your status in some way and create a lot of hassle and expense.

Low profile!

Aloha

Siki

[Thanyaburi Mac]

What possible benefit would you gain by doing this?

Why would you involve yourself with the government if there is no benefit to you and there are some possible downsides?

You must file your taxes but do so from an address in the U.S.

It does not impress the staff of governmental agencies that you are now living overseas. It may, however, change your status in some way and create a lot of hassle and expense.

Low profile!

Aloha

Siki

Hmmm, I've been filing my 1040s with my Thai address for 18 years now and have not noticed any problems with IRS or anyone/thing else.  One advantage of sorts is that I don't have to head down to the U.S. Embassy come 1040 time to pick up the forms, IRS mails them directly to me.  Another potential advantage is if you're working then filing the IRS Form 2555 is that it might be easier to claim the overseas exemption as a "foreign resident" rather than the 330 days out of 365 rules.

"Foreign Earned Income Exclusion - IRS Form 2555Americans working abroad can exclude up to $82400 per year from their US taxable income. Find out about the foreign earned income exclusion (IRS Form 2555), ...

taxes.about.com/od/taxhelp/a/ForeignIncome.htm "

And, as mentioned by another poster, does help with state tax stuff.  Enables me to file as a Non Resident in Oregon as long as I don't spend 30 days in a year there.

Mac

[Jingthing]

I do not believe it lowers your status. Forms are all available online anyway.

[PeaceBlondie]

Your status with the IRS is that you are a citizen of the USA. That does not change by reporting a foreign address. You can get your refund checks here. What address you use for your mail does not affect your eligibility for either of the tests for claiming the foreign earned income exclusion, as far as I know.

[Jingthing]

I think it might help if I sell my condo later for a profit as it is my principle residence and should be subject to the tax break of selling your principle residence. It seems to me if you filed at a US address, your argument would be weaker that your Thai residence was your principle residence.

[jonniebkk]

Ah like millions of Americans live abroad and it has no effect of their status with government agencies back home. I am most familiar with those in a non-working situation...you are still obviouisly liable for US Federal taxes and there is no need to file from a US address. I have filed from Thailand for 10 years never a problem. I have also had refund checks delivered here and other written communications from the IRS and never a problem.

As to state taxes and residency, unlike for Federal income taxes, state taxes are based on residency so if you do not meed your former states residency qualifications (some number of days per year living there) you do not have to pay state income taxes. No need to notify the state or anything. Generally, even owning a piece of property in a state will not make one liable to INCOME taxes in that state.

[Jingthing]

As to state taxes and residency, unlike for Federal income taxes, state taxes are based on residency so if you do not meed your former states residency qualifications (some number of days per year living there) you do not have to pay state income taxes. No need to notify the state or anything. Generally, even owning a piece of property in a state will not make one liable to INCOME taxes in that state.

The reason I notified my old state is because I was required to file with my old state (by income) for my last year in the US, which was a PARTIAL year state tax return. I thought this was a nifty way of letting them know what was up, so I filed with a Thai address and formally stated the last year I lived there as a partial year, including the exact date I l stopped living there. The reason I included a note is because they wanted me to start paying estimated taxes so I felt I needed to inform them I would not be sending any such estimated taxes as I had flown the coop.

Rules are rules, but the reality is that divorcing from your old state is not always cut and dried. They can and so go after people year's later, especially if you move back to your old state.

Edited February 26, 2008 by Jingthing

[JonnieB]

Yes, for your last year, there is often the need to file a state return for the months you were in the state for that year (if you flew the coop after you made the minimum income necessary to own some tax). As to estimated tax payments for the following year, if you know you will not have any tax liability because you have now left, no need to pay them or to notify them. Something that will not be owed certainly does not have to be paid in advance!

[funlovinkid]

You should probably give more information. Do you work or own a business in Thailand and pay taxes here? Then you would be protected from double taxation. I filed my first return as an expat last year and made a point of using my Thai address. I don't work in Thailand, so the main reason I did this was to also file with my old state with my Thai address. I sent my old state a note with the return informing them that I no longer live there and don't intend to file state tax forms there anymore (they didn't reply to that either way). I am sure if you provide more details about your income situation, we have some US taxpats who can provide more expert guidance. Every state has their own policies on what they require to sever tax ties there, some are more difficult than others.

I assume you already know you are still required to file federal tax forms under the same requirements as a US resident. Also, if you have a foreign bank account over 10,000 for even one minute you must file a special form with the treasury department, if not, subject to very severe financial penalties.

Really appreciate everyone's responses so far here, including the half-joking admonition to keep a "low profile". To provide more information, I'm retired (as I'm not working in Thailand nor do I own a business here), and am living off my investments. My former residence was the state of California. I did own my primary residence there until late November 2007, at which point I sold the property and incurred a substantial capital gain for which taxes will have to be paid (I'm hoping that I'm not required to pay estimated taxes on this gain prior to filing my 2007 return, something which I just thought about). I intend to file my Fed and CA State returns by April 15th as usual.

[jonniebkk]

I did own my primary residence there until late November 2007, at which point I sold the property and incurred a substantial capital gain for which taxes will have to be paid (I'm hoping that I'm not required to pay estimated taxes on this gain prior to filing my 2007 return, something which I just thought about). I intend to file my Fed and CA State returns by April 15th as usual.

Don't forget about your capital gains tax exclusion for sale of principle residence.

Also, about the only benefit the USA gives its expatriate citizens is an extra 60 days to file their Federal tax returns. So instead of being due April 15, they are due June 15th...all you have to do is write at the top of whatever 1040 Form that you were/are residing overseas on April 15th. You don't have to file any special form asking for this extension. Note: Any taxes that are due, however, are still due by the April 15 date. It's basically an extension to gather/process your tax papers and complete the Form...not an extension to pay any taxes owed.

[thaihome]

Really appreciate everyone's responses so far here, including the half-joking admonition to keep a "low profile". To provide more information, I'm retired (as I'm not working in Thailand nor do I own a business here), and am living off my investments. My former residence was the state of California. I did own my primary residence there until late November 2007, at which point I sold the property and incurred a substantial capital gain for which taxes will have to be paid (I'm hoping that I'm not required to pay estimated taxes on this gain prior to filing my 2007 return, something which I just thought about). I intend to file my Fed and CA State returns by April 15th as usual.

Would suggest you sign up with one of the mail forwarding outfits located in a non income tax state and use that as your US address. Most of them will allow you control your mailbox over the web, getting rid of the junk mail and sending real mail on to you in Thailand. They allow you choose various methods to forward to you, from DHL/Fed Ex at about $50 a pop to USPS first class for about $2.00. Yearly fees are less than $200. Some will use an Apt or Suite number so it even looks like a real address.

You will need to start cutting loose from Calif as soon a possible. It is well known as the worst state for going after income tax if they think you still have residence. Property, mailing address, and drivers license are the main things they look at.

TH

Edited February 27, 2008 by thaihome

[jstumbo]

Ah like millions of Americans live abroad and it has no effect of their status with government agencies back home. I am most familiar with those in a non-working situation...you are still obviouisly liable for US Federal taxes and there is no need to file from a US address. I have filed from Thailand for 10 years never a problem. I have also had refund checks delivered here and other written communications from the IRS and never a problem.

Hopefully you have been taking the Foreign Earned Income Exemption for the las 10 years and not paying taxes on the first ~80K earned income.

[huggybear]

I happen to be an American citizen who has been living in Thailand for the past 16 months or so. I'm at the point where I'm thinking of formally notifying the IRS of my new address in Thailand, but I'm wondering if doing so might change my status with the U.S. government, for better or worse. Does anyone have any knowledge of or experience with this?

Many thanks!

I never use my home address for anything here, Thai government or U.S. government. I use my work address. I figure I'm at work more than I am at home so what the hel*....

I file my 1040 and the exclusion paperwork, no big deal. In the few years I've been here, never heard from the IRS....

[Sojourner]

Ah like millions of Americans live abroad and it has no effect of their status with government agencies back home. I am most familiar with those in a non-working situation...you are still obviouisly liable for US Federal taxes and there is no need to file from a US address. I have filed from Thailand for 10 years never a problem. I have also had refund checks delivered here and other written communications from the IRS and never a problem.

Hopefully you have been taking the Foreign Earned Income Exemption for the las 10 years and not paying taxes on the first ~80K earned income.

This exemption only applies to foreign earned income, not income or capital gains in the States.

[jstumbo]

Ah like millions of Americans live abroad and it has no effect of their status with government agencies back home. I am most familiar with those in a non-working situation...you are still obviouisly liable for US Federal taxes and there is no need to file from a US address. I have filed from Thailand for 10 years never a problem. I have also had refund checks delivered here and other written communications from the IRS and never a problem.

Hopefully you have been taking the Foreign Earned Income Exemption for the las 10 years and not paying taxes on the first ~80K earned income.

This exemption only applies to foreign earned income, not income or capital gains in the States.

If he has been living and working in Thailand for the last 10 years, then it would be foreign earned income. But yes, only earned income, not capital gains or rental income or anything like that. I work for a US company, but my place of work is Asia. Even though they deposit my paycheck into my US bank account, it is still foreign earned income, and I can take the exclusion.

Edited February 27, 2008 by jstumbo