Us Expats And Health Care Reform

[paperwerks]

<<I will personally challenge that if I have to. I own a home in Thailand and have retirement extensions. I suggest just ignoring that "rule" if you live here and see how many they actually go after ..>>

Jingthing: I am in a similar position as you and have not set foot on US soil in 5 years. However, this whole system of penalties is being linked to your tax return and they are IRS penalties. The IRS will simply take the penalties out of your bank account if you ignore them.

If this thing passes I am going to look into filing my taxes with Thailand instead of the USA in order to qualify for the the 911d expemption.

Expats living here more than 180 days per year do have an obligation to pay Thai income tax unless they are expempted by a taxation treaty as we are. Thai does not enforce this and we have the option to pay either country and the treaty says that the other country can not come after us for double taxation.

Another advantage to paying Thai taxes is that I will then qualify for permanent residence which can lead to Thai citizenship.

Paying my CPA in the USA and a good accountant here will likely cost me more than simply paying into Obama Care but I want these bloodsuckers off my back. The Socialists in the USA who have seized power and their IRS police force are like the Terminator-They do not stop and just keep coming at you.

[Jingthing]

I support health care reform and would be happy to pay for it. But I am not going to pay willingly for ANOTHER program I am not part of. Medicare, been there, done that. If they want to tax expats for health care, extend MEDICARE to expats and also offer a government option including the same subsidies offered to non-expats, that insures us ABROAD, then that would be fair.

I am not convinced the IRS easily KNOWS whether you a bona fide expat or not by your tax return. I use my Thai address on the return. I still would be surprised if they challenge my expat claim, but yes I know they are hungry for money and it is possible.

Edited July 17, 2009 by Jingthing

[paperwerks]

<<It is definitely not the case that US citizens resident abroad are always required to pay state taxes. There is no federal law to that effect.>>

yes no Federal law. agreed. but I still think you are subject to State law.

CaptHaddock: Maybe we can just agree to disagree on this. I spoke with my CPA about this extensively and ultimately decided that moving to Texas was the safest option for me.

Just a question to consider: If you are not a NY resident then in what State can you vote in? My acountant says that all USA citizens must be legal resident of one of the 50 States and are then subject to taxation in that State. There is no such thing as a US citizen who is not a "legal" resident of any of the 50 States that I understand it of or where would they be entitled to vote? Which State would handle their absentee ballot?

[Naam]

I surly do not want to pay anymore then I have to but have never minded paying my taxes.

most probably because you never had a choice.

[BEENTHEREDONETHAT]

In 1982 I sent the IRS a letter telling them I would be out of the country in the following year and not filing taxes. Said I would contact them when I returned to the US. Haven't returned (other than short trips) and haven't contacted them since 1982.

Works for me and I plan to keep it that way.

[Jingthing]

In 1982 I sent the IRS a letter telling them I would be out of the country in the following year and not filing taxes. Said I would contact them when I returned to the US. Haven't returned (other than short trips) and haven't contacted them since 1982.

Works for me and I plan to keep it that way.

Expats are still required to file federal tax forms if they are not normally excluded to do so (for example, by low income).

The way I made it "official" was filing a partial year state return with my old state. The first part of the year as a state resident, and claimed Thailand as my residence for the remainder of that year. Then I stopped filing state taxes. I think the main risk of a problem with this is if I return to live in that state.

Edited July 17, 2009 by Jingthing

[vagabond48]

If this thing passes I am going to look into filing my taxes with Thailand instead of the USA in order to qualify for the the 911d expemption.

Expats living here more than 180 days per year do have an obligation to pay Thai income tax unless they are expempted by a taxation treaty as we are. Thai does not enforce this and we have the option to pay either country and the treaty says that the other country can not come after us for double taxation.

Are you suggesting that even if we do not generate any income in Thailand, we can legally choose to file a Thai return on our U.S. generated income?

[vagabond48]

The way I made it "official" was filing a partial year state return with my old state. The first part of the year as a state resident, and claimed Thailand as my residence for the remainder of that year. Then I stopped filing state taxes. I think the main risk of a problem with this is if I return to live in that state.

I did the same thing with a variation. I claimed AZ was my new address and got a AZ driver's license. I thought I would use AZ as my future U.S. base. After 3 months, I left for Thailand then came back to AZ a year later and stayed 2 months. I decided that I wont use AZ as a base after all and went back to Thailand so I only "lived" in AZ for 5 months.

[paperwerks]

<<Are you suggesting that even if we do not generate any income in Thailand, we can legally choose to file a Thai return on our U.S. generated income?>>

Yes, I believe this to be the case. In addition, I believe you are actually "obligated" and considered a resident for tax purposes if you live in Thailand for more than 180 days per year and owe based on your USA passive income such as interest and dividends.

The thing is that you have an optional exemption if your country has a tax treaty to avoid double taxation with thailand as most western countries do. Also, Thai revenue seems to not be looking to falangs for taxation that I have heard of.

But it would be easy for them do so in the future if they wish just by looking in the passport and making us file a tax report (which you could check off exempt by treaty if applicable) upon departure. I don't believe they are advanced enough to sort this out at this time but in 10 years...............?

[BEENTHEREDONETHAT]

In 1982 I sent the IRS a letter telling them I would be out of the country in the following year and not filing taxes. Said I would contact them when I returned to the US. Haven't returned (other than short trips) and haven't contacted them since 1982.

Works for me and I plan to keep it that way.

Expats are still required to file federal tax forms if they are not normally excluded to do so (for example, by low income).

The way I made it "official" was filing a partial year state return with my old state. The first part of the year as a state resident, and claimed Thailand as my residence for the remainder of that year. Then I stopped filing state taxes. I think the main risk of a problem with this is if I return to live in that state.

I have no US address and no US bank account, so I assume I have dropped off the radar, so to speak. Also generate no income in the US.

[Jingthing]

I have no US address and no US bank account, so I assume I have dropped off the radar, so to speak. Also generate no income in the US.

I still think you are supposed to file if your income from ANY country goes over the minimum.

Edited July 17, 2009 by Jingthing

[BEENTHEREDONETHAT]

I have no US address and no US bank account, so I assume I have dropped off the radar, so to speak. Also generate no income in the US.

I still think you are supposed to file if your income from ANY country goes over the minimum.

For some reason after not living there or using any of their services for 27 years I don't feel strongly obligated to support the US politicians or provide bailout money for the rich. They are going to have to keep getting along without my assistance.

[Jingthing]

I don't make the rules. I understand. Up to you. However, I think you are legally obligated to file anyway. Who can know whether this will ever bite you or not?

[Naam]

If this thing passes I am going to look into filing my taxes with Thailand instead of the USA in order to qualify for the the 911d expemption.

Expats living here more than 180 days per year do have an obligation to pay Thai income tax unless they are expempted by a taxation treaty as we are. Thai does not enforce this and we have the option to pay either country and the treaty says that the other country can not come after us for double taxation.

Are you suggesting that even if we do not generate any income in Thailand, we can legally choose to file a Thai return on our U.S. generated income?

sorry to prick your bubble Paperwerks as you did not interprete the double tax agreement properly. of course you can opt to pay your income tax in Thailand. BUT it is still mandatory for you to file an IRS tax return. you are not charged double taxes but the IRS will deduct from your tax bill the taxes you have already paid to the thai taxman.

in other words: if your thai taxes are higher than the U.S. ones you don't pay a single penny, if they are lower you are required to hand over the difference into the claws of the IRS. if you don't pay anything in Thailand because income tax collection is not enforced you pay as you have paid and will pay till the end of your natural life or till you drop U.S. citizenship.

advice: abandon any wet dream, get a chilled beer from the fridge and relax!

edited for addition:

Are you suggesting that even if we do not generate any income in Thailand, we can legally choose to file a Thai return on our U.S. generated income?

not even in wet dreams!

Edited July 17, 2009 by Naam

[vagabond48]

Are you suggesting that even if we do not generate any income in Thailand, we can legally choose to file a Thai return on our U.S. generated income?

not even in wet dreams!

Hey Worf, in my wet dreams, everything is possible.

wow, some detour, from health reform to wet dreams.

[delmersomsri]

You can call it whining, complaining, or what ever you wish. I'm concerned that I may end up required to pay for or penalized for not having medical insurance coverage that I cannot even use while outside the US. I realize that medicare will kick in at 65 and part B will be deducted from my SS and will be absolutely useless while abroad. Also the sales tax by the Fed (VAT) while still holding onto the income tax will be a major blow to those who championed the replacement of the income tax with a national sales tax. Obama would certainly get his cake and eat it too. Move over Tricky Dick. You have a replacement! .

[CaptHaddock]

<<It is definitely not the case that US citizens resident abroad are always required to pay state taxes. There is no federal law to that effect.>>

yes no Federal law. agreed. but I still think you are subject to State law.

CaptHaddock: Maybe we can just agree to disagree on this. I spoke with my CPA about this extensively and ultimately decided that moving to Texas was the safest option for me.

Just a question to consider: If you are not a NY resident then in what State can you vote in? My acountant says that all USA citizens must be legal resident of one of the 50 States and are then subject to taxation in that State. There is no such thing as a US citizen who is not a "legal" resident of any of the 50 States that I understand it of or where would they be entitled to vote? Which State would handle their absentee ballot?

What I can agree on is that you still don't know what you are talking about. Just why would you consult a CPA for a legal opinion? To take the obvious cases, residents of Puerto Rico and Guam are US citizens, but are not residents of any state. Nor are expats who have established legal residence abroad. At least not those who never resided in VA.

As for voting, it is true that only states and, presumably, territories provide absentee ballots. I don't plan to vote since that might be used to establish tax liability, although I do not know for a fact that absentee voting does establish tax liability. I consulted the rules for determining NY residency and if you have severed your ties as I have described, NY does not claim authority to tax you.

[CaptHaddock]

I realize that medicare will kick in at 65 and part B will be deducted from my SS and will be absolutely useless while abroad. Also the sales tax by the Fed (VAT) while still holding onto the income tax will be a major blow to those who championed the replacement of the income tax with a national sales tax. Obama would certainly get his cake and eat it too. Move over Tricky Dick. You have a replacement! .

1. Medicare is not compulsory. If you don't sign up for it, there will be no deduction from your SS benefit.

2. If a VAT tax is adopted in the US, it will only apply to goods sold in the US. As an expat, a VAT would not cost you a penny, unless you chose to purchase goods in the US for some reason.

3. No significant US political group pursued replacement of income tax with a VAT and elimination of income tax is not under consideration. Many european countries combine both taxes, for example.

[Lopburi99]

I realize that medicare will kick in at 65 and part B will be deducted from my SS and will be absolutely useless while abroad. Also the sales tax by the Fed (VAT) while still holding onto the income tax will be a major blow to those who championed the replacement of the income tax with a national sales tax. Obama would certainly get his cake and eat it too. Move over Tricky Dick. You have a replacement! .

1. Medicare is not compulsory. If you don't sign up for it, there will be no deduction from your SS benefit.

2. If a VAT tax is adopted in the US, it will only apply to goods sold in the US. As an expat, a VAT would not cost you a penny, unless you chose to purchase goods in the US for some reason.

3. No significant US political group pursued replacement of income tax with a VAT and elimination of income tax is not under consideration. Many european countries combine both taxes, for example.

A minor enhancement to The Capt's #1 above:

Medicare "Part A" (basic Medicare) is free and enrollment is automatic at age 65 (or after the 25th month of disability). Medicare "Part B" is not free, the monthly premium currently being US$96.40, but is optional. Medicare Part A covers inpatient hospitalization only while Part B covers outpatient care (and much more), a major factor in my opinion. A person can at first deny Part B coverage but pick it up at a later date, however a 10% per year penalty is surcharged for each 12-month period Part B could have been in effect but wasn't. There is also a "Part D" for prescription coverage, also optional. For complete coverage details refer to Medicare.gov.

Some of us are signing up for Part B even though we live in Thailand and would need to go to the States for treatment/coverage. We view this as a contingency plan if something serious befalls us which may make treatment in the States desirable or necessary for any number of reasons.

Edited July 18, 2009 by Lopburi99

[longball53098]

We retired US military expats living here in LOS and other countries must sign up for Med B or loose our Tricare coverage.

[Naam]

Are you suggesting that even if we do not generate any income in Thailand, we can legally choose to file a Thai return on our U.S. generated income?

not even in wet dreams!

Hey Worf, in my wet dreams, everything is possible. wow, some detour, from health reform to wet dreams.

i don't see any detour. it's about health reform financed by taxes and the relevant postings were about how to pay (or not to pay) these taxes.

[Jingthing]

You can call it whining, complaining, or what ever you wish. I'm concerned that I may end up required to pay for or penalized for not having medical insurance coverage that I cannot even use while outside the US.

We should not have to pay for a benefit we are not included in. Like I said before, many of us did contribute to medicare for decades and living abroad, nada. Enough already.

[Jingthing]

OK, here are the penalties being discussed if we don't get US health insurance and fail to be recognized as bona fide expats (assuming there will be an expat exclusion):

http://www.washingtonpost.com/wp-dyn/conte...ST2009072103763

A bill being debated in the House this week would charge individuals a penalty of 2.5 percent of income above $9,000, up to the price of the average premium sold nationwide. The fines would begin in 2013.

A bill passed by the Senate Health, Education, Labor and Pensions Committee last week would set the penalty at $750 per person. Individuals earning less than 150 percent of the poverty level, or about $16,245, would be exempt.

[hhgz]

The US health care reform is still very much a work in progress. Complaining about penalties, rationing, and similarities to another country's health plan is premature.

[cloudhopper]

http://globaleconomicanalysis.blogspot.com...t-obama-on.html

[on-on]

The US health care reform is still very much a work in progress. Complaining about penalties, rationing, and similarities to another country's health plan is premature.

Confirmed. Conjecture is fine of course, but there's very little substance to debate right now in terms of effects, because there's almost nothing that's reached even a consensus view yet, much less made it into law or past committee and with the August recess coming up and everyone unable to reach any kind of consensus (even among Democrats themselves) I would expect what comes out the other side of the recess to be totally unpredictable.

[Carmine6]

The US health care reform is still very much a work in progress. Complaining about penalties, rationing, and similarities to another country's health plan is premature.

Confirmed. Conjecture is fine of course, but there's very little substance to debate right now in terms of effects, because there's almost nothing that's reached even a consensus view yet, much less made it into law or past committee and with the August recess coming up and everyone unable to reach any kind of consensus (even among Democrats themselves) I would expect what comes out the other side of the recess to be totally unpredictable.

Under the guise of urgency, this Congress passed the stimulus bill without even reading it or allowing scrutiny. Yet the President waited 5 days to sign it. Same lack of scrutiny for the omnibus spending bill which funded the 2nd half of the government's fiscal year, but which was an 11% increase in spending.

The only thing stopping this bill from being rammed through was public opinion started moving against it. I think based on their history, the burden is on Congress to show that the speculation is wrong, by presenting bills and then allowing time for commentary. This bill would not even take effect until 2013, so why the urgency? Cracking down on Medicare fraud and looking for savings do not require any new legislation.

[PeaceBlondie]

Keep in mind that federal law-making has been fatally broken for over 50 years. Impossibly broken.

[on-on]

Under the guise of urgency, this Congress passed the stimulus bill without even reading it or allowing scrutiny. Yet the President waited 5 days to sign it. Same lack of scrutiny for the omnibus spending bill which funded the 2nd half of the government's fiscal year, but which was an 11% increase in spending.

The only thing stopping this bill from being rammed through was public opinion started moving against it. I think based on their history, the burden is on Congress to show that the speculation is wrong, by presenting bills and then allowing time for commentary. This bill would not even take effect until 2013, so why the urgency? Cracking down on Medicare fraud and looking for savings do not require any new legislation.

Under the guise of urgency is not a good way to describe Bear Stearns collapsing and several other major banks verging on collapse (with Lehman being allowed to) and the overnight markets freezing and on and on. That's a whole other can of worms and I'm not thrilled with the economic policy back home by any means, but the American healthcare situation has gradually been getting more absurd (at an ever-quickening pace) for a long time and bears no resemblance to the bank bailout, TARP and Fed program issues.

Anyway, what's been gumming this up is not public opinion, really, it's money. The public's simply responding negatively to what it's seeing, which is a mix of Congress infighting and appearing to do nothing bold (while actually doing nothing at all) that would merit public support combined with massive public relations, advertising and political campaigns against any reform. Basically, when you tell people you're going to do something bold and then you do something incredibly lukewarm you lose your hard support and you're left with the great "silent majority" and the detractors in a debate that's now pretty one-sided, because everyone who did support you gave up when they realized that you were going to serve up a steaming plate of nothing. That leaves the "national conversation" much more against reform than for it. If this initiative fails, it'll be just another example of how torn between traditional "liberal" (American version) interests and business interests the Democratic Party is and how completely ineffective they are because of it.

On a side note, anyone who believes the nonsense theater of the Republicans as conservatives and the Democrats as liberals needs to put down the Kool-Aid. There may be social differences that are stark when it comes to God, Guns and Gays, but when it comes to economics there's almost no substantive difference and, as many have noted, as soon as they figured out Democrats would take back Congress and the White House everyone from Wall St. to the Healthcare lobby made sure that the K Street project got less money than the Democratic lobbyists - and the Democrats took it hand over fist, lead surely by the DLC, because while they're not enthusiastic ideological supporters of conservative economic policies the way the Republicans are, they're pragmatic reach-around-giving supporters who take the money and play the game. That's why there will be no reform, because everyone but a very few people on either side (Feingold, Sanders, Paul, Kucinich, etc - whatever you may think of them) are completely bought and paid for in a system with private financing where campaigns never really end anymore and in which, in 2008, Presidential candidates raised over $1,000,000,000 directly and the election expenses by all groups ran a bit over $5,000,000,000 - with Congress following suit proportionally. It's all about the money.

Edited July 29, 2009 by on-on

[cloudhopper]

Great commentary on this issue-

http://www.joebageant.com/joe/2009/08/the-...ng-grandma.html