Usa'S Irs Extending Its Reach To Thai Ex-Pats

[moe666]

It really is easy, I have a friend who works in Thailand and has for years doesn't pay any US tax he just stopped, nothing has come of it. I told him the key now is to never ever come home or file another return. No paper trail as his employer doesn't report to iRS. Yes he is taking a chance but so far so good

Once you have reported you are now in the system and have to continue. In the long run probably not a good thing to do as it is breaking the law.

[JAFO]

Funny how the US govt LOVES to create fear and panic. Its how the government works. Threats and scare tactics. "JAIL", "SEVERE fines", "PENALITIES" ....yawn.......

Just do your due diligence. What they are most certainly afraid of is that money is slipping away and they cannot control it. So they launch these scare tactics to get you to send in some inquiries. Once that is done, you are on the radar and now in the system. A lot of long standing citizens are exiting the US. SS benefits are now being mailed off shore at quickly rising rate (11%) in 2009 way up from 5% less then 3 years ago. People are checking out for a better quality of life.

I think one area that they are clearly after is the large volume of recent immigrants who came to the US, opened cash based businesses(primarily restaurants) and have been sending money back to their home country. Great US scam and easy to do. They are clearly after big fish and I know of quite a few of them. In fact I know a few that simply went off the grid. Exited to a different country. Hard to track what they cant find. I applaud them.

I am a US Citizen. I will never surrender my citizenship. I love the country. I loved the opportunities it once offered but now its a struggling poorly governed country and has lost its way.

Best thing to do is remain retired. Relax. Enjoy life, stay off the radar.

Good Luck to all

[flying]

What they are most certainly afraid of is that money is slipping away and they cannot control it.

That thought occurs to me when I fly out of the US.

Ever notice lately they actually have a thug at the entry line to board planes exiting the USA literally asking you if you are carrying

more than 10k USD? Ever notice the heavy TSA presence when your leaving the US & the zero presence entering?

It is not so much terrorism control is it?

[JAFO]

What they are most certainly afraid of is that money is slipping away and they cannot control it.

That thought occurs to me when I fly out of the US.

Ever notice lately they actually have a thug at the entry line to board planes exiting the USA literally asking you if you are carrying

more than 10k USD? Ever notice the heavy TSA presence when your leaving the US & the zero presence entering?

It is not so much terrorism control is it?

^Absolutely. On my last visit I had a descent level of us currency on me. It went through Inspection and xray. They pulled me aside, Open and inspected my back back and specifically pulled out the envelope with the banks wrapper on it. They asked me about it. It was under the legal limit but they were sure interested. I said "I always carry cash. Its how I live. In Thailand you have to have 2006 or newer bills or banks will not convert. So these were fairly nice condition. But regardless there is no reason to question me about money. Funny how they have rules, laws and regulations and if you are under it, they still question it.

It is very easy to live a cash based life and be off the radar. Just have to know how to manage it. I am not a tax evader nor hiding from anyone but I am sure tired of Big Brother wanting to know everything about what I am doing. Quite honestly it is none of their darn business.

I laugh sometimes....... Land of the Free????? Boy is that an interesting topic to be discussed. Maybe back in late 1700's through 1800's but now there is nothing FREE about America. In fact it is one of the most highly governed, monitored and controlled countries in the world and yet is so easily exploited. Only winners are the lawyers as they manipulate all the letters of the laws to baffle everyone. The US government is really such an easy mark. They haven't figured it out yet. The more laws, rules, regulations they make and the more they document it, the easier it is to exploit. "DOLTS!!!"

[el jefe]

Yeah, it must really suck to be an American. I wonder why 3/4 of the world's population wants to move there?!

What you're forgetting is that USA has one of the lowest tax rates on individuals. While it's unfortunate that expats that never set foot in the US and green card holders are required to pay tax on their worldwide income, what the IRS is really looking for are people living in the US who are hiding their millions in overseas accounts. Most of you are complaining about reporting your 800k baht. What's the big deal? If you've got it in a Thai bank and are earning 2% interest, the US tax is less than $100 for most of you. And there is a legal way around it. Give up your citizenship. Hmmm, I wonder why so few people do that?

As for the above comment about double taxation of US corporate profits when they are repatriated, yes, that is a problem. The laws regarding taxation of huge multi-national corporations are way beyond the scope of TV (and really has nothing to do with this thread). But if the US govt comes up with a plan whereby those companies can repatriate some of that money at a reduced tax rate it will solve many of the current economic problems in the US. Most of Europe doesn't have a plan or a clue.

Ooops. How do I get those worms back in the can?

Funny guy, you might be right that it was done to discourage people hiding their money offshore but for people truly living somewhere else it gives them double taxation. Does not sound fair to me. The whole world except the US seems to think this way. We cant all be wrong.

As your other comment about Europe and the US. I have lots more faith in Europe then in the US to be honest. The debt of the US is so high its crazy. If the Chinese ever decide on an other world currency America is fuc_ked. If oil will be traded in euro's instead of $ US is fuc_ked too.

Im not saying its all doom and gloom im saying the US has some serious problems.

If you work overseas, the first ~$100,000 is tax free, even if you don't pay any tax where it is earned. Any income above that, if it is taxed in the country where it is earned, is eligible for the Foreign Tax Credit. Investment income too. So where is the double taxation? And if you don't pay any taxes in your resident country, there's no double taxation then either, is there?

Sure the US has problems but at least they control the outcome. Half of Europe has more serious problems and because of the Euro they can't control their own destiny. And the countries that are doing better get stuck with the bill.

Changing the quote and settlement of oil from dollars to Euros would have only a minor effect.

China is already switching to a basket of currencies. But they still need to protect their investment in dollars. It's really not in their best interests to see the dollar fall for many reasons.

[BEENTHEREDONETHAT]

Yeah, it must really suck to be an American. I wonder why 3/4 of the world's population wants to move there?!

What you're forgetting is that USA has one of the lowest tax rates on individuals. While it's unfortunate that expats that never set foot in the US and green card holders are required to pay tax on their worldwide income, what the IRS is really looking for are people living in the US who are hiding their millions in overseas accounts. Most of you are complaining about reporting your 800k baht. What's the big deal? If you've got it in a Thai bank and are earning 2% interest, the US tax is less than $100 for most of you. And there is a legal way around it. Give up your citizenship. Hmmm, I wonder why so few people do that?

As for the above comment about double taxation of US corporate profits when they are repatriated, yes, that is a problem. The laws regarding taxation of huge multi-national corporations are way beyond the scope of TV (and really has nothing to do with this thread). But if the US govt comes up with a plan whereby those companies can repatriate some of that money at a reduced tax rate it will solve many of the current economic problems in the US. Most of Europe doesn't have a plan or a clue.

Ooops. How do I get those worms back in the can?

Funny guy, you might be right that it was done to discourage people hiding their money offshore but for people truly living somewhere else it gives them double taxation. Does not sound fair to me. The whole world except the US seems to think this way. We cant all be wrong.

As your other comment about Europe and the US. I have lots more faith in Europe then in the US to be honest. The debt of the US is so high its crazy. If the Chinese ever decide on an other world currency America is fuc_ked. If oil will be traded in euro's instead of $ US is fuc_ked too.

Im not saying its all doom and gloom im saying the US has some serious problems.

If you work overseas, the first ~$100,000 is tax free, even if you don't pay any tax where it is earned. Any income above that, if it is taxed in the country where it is earned, is eligible for the Foreign Tax Credit. Investment income too. So where is the double taxation? And if you don't pay any taxes in your resident country, there's no double taxation then either, is there?

Sure the US has problems but at least they control the outcome. Half of Europe has more serious problems and because of the Euro they can't control their own destiny. And the countries that are doing better get stuck with the bill.

Changing the quote and settlement of oil from dollars to Euros would have only a minor effect.

China is already switching to a basket of currencies. But they still need to protect their investment in dollars. It's really not in their best interests to see the dollar fall for many reasons.

That $100,000 may be true if you are working oversea, but many of us are retired and our earnings are from investments. So Big Brother wants you to pay on all of the earnings, no deductions for not being there.

[KeyserSoze01]

That $100,000 may be true if you are working oversea, but many of us are retired and our earnings are from investments. So Big Brother wants you to pay on all of the earnings, no deductions for not being there.

This is only the case if you broker investment transactions though a US entity, such as a brokerage house. If you are offshore for 335 days a year and your income is derived from offshore activities or investments, then in 2011 the first $92,900 is exempt from federal income taxes... My advice would be to open investment accounts in an offshore tax haven, such as Singapore. You are still not exempt from FBAR requirements, but as long as you can prove where the initial funding came from and any subsequent income was not generated in the US, you are ok.

[farang000999]

So capital gains are only taxed if they are purchased through an American brokerage? You can buy stock in Walmart via a Singaporean brokerage and if you reside outside the USA for 335 days you don't have to pay taxes on captial gains?

As far as I can tell, the foriegn earned income exclusion does not apply to passive income which capital gains falls under.

[farang000999]

Yeah, it must really suck to be an American. I wonder why 3/4 of the world's population wants to move there?!

What you're forgetting is that USA has one of the lowest tax rates on individuals. While it's unfortunate that expats that never set foot in the US and green card holders are required to pay tax on their worldwide income, what the IRS is really looking for are people living in the US who are hiding their millions in overseas accounts. Most of you are complaining about reporting your 800k baht. What's the big deal? If you've got it in a Thai bank and are earning 2% interest, the US tax is less than $100 for most of you. And there is a legal way around it. Give up your citizenship. Hmmm, I wonder why so few people do that?

As for the above comment about double taxation of US corporate profits when they are repatriated, yes, that is a problem. The laws regarding taxation of huge multi-national corporations are way beyond the scope of TV (and really has nothing to do with this thread). But if the US govt comes up with a plan whereby those companies can repatriate some of that money at a reduced tax rate it will solve many of the current economic problems in the US. Most of Europe doesn't have a plan or a clue.

Ooops. How do I get those worms back in the can?

Funny guy, you might be right that it was done to discourage people hiding their money offshore but for people truly living somewhere else it gives them double taxation. Does not sound fair to me. The whole world except the US seems to think this way. We cant all be wrong.

As your other comment about Europe and the US. I have lots more faith in Europe then in the US to be honest. The debt of the US is so high its crazy. If the Chinese ever decide on an other world currency America is fuc_ked. If oil will be traded in euro's instead of $ US is fuc_ked too.

Im not saying its all doom and gloom im saying the US has some serious problems.

If you work overseas, the first ~$100,000 is tax free, even if you don't pay any tax where it is earned. Any income above that, if it is taxed in the country where it is earned, is eligible for the Foreign Tax Credit. Investment income too. So where is the double taxation? And if you don't pay any taxes in your resident country, there's no double taxation then either, is there?

Sure the US has problems but at least they control the outcome. Half of Europe has more serious problems and because of the Euro they can't control their own destiny. And the countries that are doing better get stuck with the bill.

Changing the quote and settlement of oil from dollars to Euros would have only a minor effect.

China is already switching to a basket of currencies. But they still need to protect their investment in dollars. It's really not in their best interests to see the dollar fall for many reasons.

if you are self employed u still have to pay SS/medicare self employment tax.

[dekestone]

FATCA now doesn't come into effect until Jan 1, 2014. There may be some more changes before then, judging by the growing backlash among bankers, at least according to this article.

"A senior American finance executive at the Hong Kong branch of a major investment house told Michel that FATCA was "America's most imperialist act since it invaded the Philippine Islands in 1899." The regulation, Michel said, was "engendering a profound and growing anti-American sentiment abroad."

http://www.reuters.com/article/2011/08/19/us-usa-tax-fatca-idUSTRE77I38220110819

[dinger]

So let me see if I have this correct. I am living here on a retirement visa. I receive a monthly pension from the State of California, where I worked for 40 years. The retirement money is deposited into my U S bank account after the appropriate taxes are withheld. Then periodicaly I transfer money to my Thai bank account for living expenses. So yes I do exceed the 10k threshold. I file my normal tax return and include my earned interest here (though there is no 1099 or equivelant form)

And now they want me to report it again so they can figure out another way to tax me.

As said before going off the grid and dealing in cash

[TallGuyJohninBKK]

So let me see if I have this correct. I am living here on a retirement visa. I receive a monthly pension from the State of California, where I worked for 40 years. The retirement money is deposited into my U S bank account after the appropriate taxes are withheld. Then periodicaly I transfer money to my Thai bank account for living expenses. So yes I do exceed the 10k threshold. I file my normal tax return and include my earned interest here (though there is no 1099 or equivelant form)

And now they want me to report it again so they can figure out another way to tax me.

As said before going off the grid and dealing in cash

I don't this you have this correct....

Your pension income from CA is liable for federal tax, but generally not CA state income tax, assuming you're living full-time out of the U.S. and don't have property, or business or certain other state tax triggering interests in CA.

The $10,000 threshold on reporting isn't triggering a tax obligation. It's simply a reporting requirement for any U.S. citizen who at any time during the year has a balance of $10,000 or more in foreign bank accounts. The reporting trigger is $10,000 or more at any one time... not $10,000 or more of cumulative transfers during the year. So by spreading out your pension funds transfers to Thailand, you could keep your account balance below $10,000 U.S. if you wanted to and avoid the reporting requirement.

The interest you earn on any Thai bank deposits if it's any meaningful sum, I believe, will automatically have 15% withholding taken out by the Thai bank for the Thai tax rate. That amount you've already paid is then an offset against your U.S. federal tax liability for that interest income, since unfortunately, Americans are taxed on their earnings regardless of where they occur.

None of that, however, as far as I can tell, amounts to you being double taxed on your activities. But I'm not a CPA, so if I'm missing something, I'm OK to be proven wrong.

[SolarOhm]

Yeah, it must really suck to be an American. I wonder why 3/4 of the world's population wants to move there?!

What you're forgetting is that USA has one of the lowest tax rates on individuals. While it's unfortunate that expats that never set foot in the US and green card holders are required to pay tax on their worldwide income, what the IRS is really looking for are people living in the US who are hiding their millions in overseas accounts. Most of you are complaining about reporting your 800k baht. What's the big deal? If you've got it in a Thai bank and are earning 2% interest, the US tax is less than $100 for most of you. And there is a legal way around it. Give up your citizenship. Hmmm, I wonder why so few people do that?

As for the above comment about double taxation of US corporate profits when they are repatriated, yes, that is a problem. The laws regarding taxation of huge multi-national corporations are way beyond the scope of TV (and really has nothing to do with this thread). But if the US govt comes up with a plan whereby those companies can repatriate some of that money at a reduced tax rate it will solve many of the current economic problems in the US. Most of Europe doesn't have a plan or a clue.

Ooops. How do I get those worms back in the can?

Don't know where you got the idea that USA has low taxes on its citizens. When your income is substantial combining State and Federal taxes you can end up paying 54 cents in every dollar you earn to Uncle Sam.

[lannarebirth]

So capital gains are only taxed if they are purchased through an American brokerage? You can buy stock in Walmart via a Singaporean brokerage and if you reside outside the USA for 335 days you don't have to pay taxes on captial gains?

As far as I can tell, the foriegn earned income exclusion does not apply to passive income which capital gains falls under.

I believe the 92k $ exemption is for Earned Income, not investment income.

[KeyserSoze01]

So capital gains are only taxed if they are purchased through an American brokerage? You can buy stock in Walmart via a Singaporean brokerage and if you reside outside the USA for 335 days you don't have to pay taxes on captial gains?

As far as I can tell, the foriegn earned income exclusion does not apply to passive income which capital gains falls under.

I believe the 92k $ exemption is for Earned Income, not investment income.

The way around this is to open a foreign shell company from which you make your investments. The company in turn pays you a salary from the proceeds. As long as the salary is below the exclusionary amount, you are ok. This is not the easiest way to operate in Thailand with the labor laws / work permit situation being what they are.

[BEENTHEREDONETHAT]

I find it interesting that the IRS wasnts yoiu to report any accounts over 10,000 but banks only report accounts over $50,000

"Conceived as a way to enlist the world in a crackdown on wealthy Americans evading tax, it gives global financial institutions and investment entities a choice: either collect and turn over data on U.S. clients with accounts of at least $50,000, or withhold 30 percent of the interest, dividend and investment payments due those clients and send the money to the IRS."

"from Reuter's see above post.

[migrant]

So let me see if I have this correct. I am living here on a retirement visa. I receive a monthly pension from the State of California, where I worked for 40 years. The retirement money is deposited into my U S bank account after the appropriate taxes are withheld. Then periodicaly I transfer money to my Thai bank account for living expenses. So yes I do exceed the 10k threshold. I file my normal tax return and include my earned interest here (though there is no 1099 or equivelant form)

And now they want me to report it again so they can figure out another way to tax me.

As said before going off the grid and dealing in cash

I don't this you have this correct....

Your pension income from CA is liable for federal tax, but generally not CA state income tax, assuming you're living full-time out of the U.S. and don't have property, or business or certain other state tax triggering interests in CA.

The $10,000 threshold on reporting isn't triggering a tax obligation. It's simply a reporting requirement for any U.S. citizen who at any time during the year has a balance of $10,000 or more in foreign bank accounts. The reporting trigger is $10,000 or more at any one time... not $10,000 or more of cumulative transfers during the year. So by spreading out your pension funds transfers to Thailand, you could keep your account balance below $10,000 U.S. if you wanted to and avoid the reporting requirement.

The interest you earn on any Thai bank deposits if it's any meaningful sum, I believe, will automatically have 15% withholding taken out by the Thai bank for the Thai tax rate. That amount you've already paid is then an offset against your U.S. federal tax liability for that interest income, since unfortunately, Americans are taxed on their earnings regardless of where they occur.

None of that, however, as far as I can tell, amounts to you being double taxed on your activities. But I'm not a CPA, so if I'm missing something, I'm OK to be proven wrong.

You got it right!!

[TallGuyJohninBKK]

One of the mail lists I subscribe to had this update re Americans and tax issues today, including some tax amnesty and extended deadline issues....

In addition to filing one's 1040 income tax return, every US citizen has also the obligation to file with the Treasury Department TD F 90-22.1 i.e. the Foreign Bank Account and Financial Records (FBAR) form of which many of us have only recently become aware. It has a non-willful penalty of up to $10,000 for not filing. The FBAR must be filed every year if one has assets or deposits in foreign accounts (i.e., checking, savings, stocks, pension, etc.) that in the aggregate are over $10,000.

The IRS advises those who have filed their 1040s but did not file their FBARs, that they should file the delinquent FBAR reports (back to 2003) (send to Department of Treasury, Post Office Box 32621, Detroit, MI 48232-0621) and attach a statement explaining why the reports are filed late. The IRS has stated they will not impose a penalty for the failure to file the delinquent FBARs if there are no underreported tax liabilities and the FBARs are filed by the new deadline of September 9, 2011 (Q #17). FBARs for this year 2010 were due on June 30, 2011 and had to be filed by that date.

US citizens who have not previously been filing a 1040 income tax return may want to take advantage of the IRS' voluntary disclosure program (announced in February 2011) which is designed to bring US taxpayers into the US tax system and provide them with a mechanism for resolving their US tax issues. The new IRS initiative applies to calendar years 2003 through 2010 and is available now by extension to September 9, 2011. Another 90 day extension if afforded upon request. The voluntary disclosure program is designed to eliminate the risk of criminal prosecution and provides for lesser civil penalties than would apply if the non-compliance came to the IRS' attention through other means. Seek professional accounting advice as soon as possible to discuss your alternatives as Democrats Abroad does not provide tax advice.

Finally, starting in 2014 (moved from 2013), foreign financial institutions will be required by the US government under the Foreign Account Tax Compliance Act (FATCA) to report information regarding accounts of US citizens to the IRS. This law requires foreign financial institutions (FFI) like your local bank, stock brokers, hedge funds, pension funds, insurance companies, trusts, etc. - to report directly to the IRS all their clients who are US persons. The penalties for the institutions that do not cooperate are steep. There is no clear idea of what foreign banking institutions will do with their US clients.

FATCA also requires US citizens who have foreign financial assets in excess of $50,000 to report those assets on a new draft version of Form 8938 to be filed with the 1040 tax return starting fiscal year 2011.

We have been in touch with Congresswoman Carolyn Maloney's (NY-14) office as she is the Co-Chair of the Americans Abroad Caucus in the US House of Representatives about our concerns. She has sent several letters over the past 3 years expressing her concerns on these important issues and how they affect Americans living outside of the U.S. She has asked Treasury Secretary Geithner to provide to her "in detail what specific steps the Treasury Department will take to ensure that current U.S. banking laws and regulations do not prevent Americans abroad from accessing the same banking services available to all Americans."

Edited September 1, 2011 by TallGuyJohninBKK

[dinger]

I Guess I didn't make my point clear

My point being, I have a perfectly legimate income source. The federal taxes are withheld prior to me receiving my monthly deposit into a U S bank. I then pay tax on the pennies worth of interest I earn there. And now the Gvmt wants to know what I am doing with my money. What is next will I have to fill out a daily expense report so they can make sure what I am spending my money on.

I understand that this reporting is not a tax trigger, yet

So let me see if I have this correct. I am living here on a retirement visa. I receive a monthly pension from the State of California, where I worked for 40 years. The retirement money is deposited into my U S bank account after the appropriate taxes are withheld. Then periodicaly I transfer money to my Thai bank account for living expenses. So yes I do exceed the 10k threshold. I file my normal tax return and include my earned interest here (though there is no 1099 or equivelant form)

And now they want me to report it again so they can figure out another way to tax me.

As said before going off the grid and dealing in cash

I don't this you have this correct....

Your pension income from CA is liable for federal tax, but generally not CA state income tax, assuming you're living full-time out of the U.S. and don't have property, or business or certain other state tax triggering interests in CA.

The $10,000 threshold on reporting isn't triggering a tax obligation. It's simply a reporting requirement for any U.S. citizen who at any time during the year has a balance of $10,000 or more in foreign bank accounts. The reporting trigger is $10,000 or more at any one time... not $10,000 or more of cumulative transfers during the year. So by spreading out your pension funds transfers to Thailand, you could keep your account balance below $10,000 U.S. if you wanted to and avoid the reporting requirement.

The interest you earn on any Thai bank deposits if it's any meaningful sum, I believe, will automatically have 15% withholding taken out by the Thai bank for the Thai tax rate. That amount you've already paid is then an offset against your U.S. federal tax liability for that interest income, since unfortunately, Americans are taxed on their earnings regardless of where they occur.

None of that, however, as far as I can tell, amounts to you being double taxed on your activities. But I'm not a CPA, so if I'm missing something, I'm OK to be proven wrong.

You got it right!!

[TallGuyJohninBKK]

Don't worry too much... If and when the government wants more tax from you, they'll send the black helicopters to pick it up... unless, of course, you're wearing your tinfoil hat... in which case, they won't be able to locate you via ESP.

And now the Gvmt wants to know what I am doing with my money.

Actually, they just want to know IF you have more than $10,000 in foreign bank accounts, not what you may be doing with it there.

And as I mentioned above, particularly for monthly pension payment transfers, you could easily and legally avoid the $10K reporting requirement depending on how you handle your US-Thailand transfers.

Edited September 1, 2011 by TallGuyJohninBKK

[Lost in LOS]

So capital gains are only taxed if they are purchased through an American brokerage? You can buy stock in Walmart via a Singaporean brokerage and if you reside outside the USA for 335 days you don't have to pay taxes on captial gains?

As far as I can tell, the foriegn earned income exclusion does not apply to passive income which capital gains falls under.

I believe the 92k $ exemption is for Earned Income, not investment income.

yep, you have to pay on any money you get other than payroll. If you made money in the states, paid all your taxes, everything legal, then put it in a bank here you must report the interest and pay the taxes [for example]

The US is out of control, I worked long days, every day, saved my money, paid my taxes, did my military service, now just LEAVE ME ALONE. I use nothing at all in the States.

[vpi78]

Why do Americans, who live outside of the USA pay taxes in the USA ?

Because they insisted that they didnt want to be a British colony anymore....

If they had stayed a colony, they would have had the benefit's enjoyed by many commonwealth countries today in that citizens do not have to pay tax in their home countries if they are no longer resident in said country....

So its their own fault...

And it has been well worth it.

[el jefe]

Yeah, it must really suck to be an American. I wonder why 3/4 of the world's population wants to move there?!

What you're forgetting is that USA has one of the lowest tax rates on individuals. While it's unfortunate that expats that never set foot in the US and green card holders are required to pay tax on their worldwide income, what the IRS is really looking for are people living in the US who are hiding their millions in overseas accounts. Most of you are complaining about reporting your 800k baht. What's the big deal? If you've got it in a Thai bank and are earning 2% interest, the US tax is less than $100 for most of you. And there is a legal way around it. Give up your citizenship. Hmmm, I wonder why so few people do that?

As for the above comment about double taxation of US corporate profits when they are repatriated, yes, that is a problem. The laws regarding taxation of huge multi-national corporations are way beyond the scope of TV (and really has nothing to do with this thread). But if the US govt comes up with a plan whereby those companies can repatriate some of that money at a reduced tax rate it will solve many of the current economic problems in the US. Most of Europe doesn't have a plan or a clue.

Ooops. How do I get those worms back in the can?

Don't know where you got the idea that USA has low taxes on its citizens. When your income is substantial combining State and Federal taxes you can end up paying 54 cents in every dollar you earn to Uncle Sam.

Please give me an example of how you can get to 54% effective rate in the US. The maximum tax rate is 35% if your taxable income (after deductions) is over $379,000. If you're self employed making that much, add 2.9% for Medicare. Maximum state (and local tax) is about 12% and there should be some benefit to deducting those taxes on your federal return. The maximum should therefore be under 50%.

This assumes you have no deductions and all of your income is structured to be taxed at the maximum tax rates. If that's the case, you need a new accountant and financial advisor.

[el jefe]

So let me see if I have this correct. I am living here on a retirement visa. I receive a monthly pension from the State of California, where I worked for 40 years. The retirement money is deposited into my U S bank account after the appropriate taxes are withheld. Then periodicaly I transfer money to my Thai bank account for living expenses. So yes I do exceed the 10k threshold. I file my normal tax return and include my earned interest here (though there is no 1099 or equivelant form)

And now they want me to report it again so they can figure out another way to tax me.

As said before going off the grid and dealing in cash

I don't this you have this correct....

Your pension income from CA is liable for federal tax, but generally not CA state income tax, assuming you're living full-time out of the U.S. and don't have property, or business or certain other state tax triggering interests in CA.

The $10,000 threshold on reporting isn't triggering a tax obligation. It's simply a reporting requirement for any U.S. citizen who at any time during the year has a balance of $10,000 or more in foreign bank accounts. The reporting trigger is $10,000 or more at any one time... not $10,000 or more of cumulative transfers during the year. So by spreading out your pension funds transfers to Thailand, you could keep your account balance below $10,000 U.S. if you wanted to and avoid the reporting requirement.

The interest you earn on any Thai bank deposits if it's any meaningful sum, I believe, will automatically have 15% withholding taken out by the Thai bank for the Thai tax rate. That amount you've already paid is then an offset against your U.S. federal tax liability for that interest income, since unfortunately, Americans are taxed on their earnings regardless of where they occur.

None of that, however, as far as I can tell, amounts to you being double taxed on your activities. But I'm not a CPA, so if I'm missing something, I'm OK to be proven wrong.

I am a CPA and you have this basically correct. The double taxation is minimal, if it exists at all.

There are two different points being made in this thread. Some people don't want to fill out a simple form reporting where they have bank accounts. The US govt wouldn't make a big deal about this if US taxpayers were following the rules and paying their legal obligations. The second point is that some people don't want to pay any taxes on money they can hide.

[dekestone]

There are two different points being made in this thread. Some people don't want to fill out a simple form reporting where they have bank accounts. The US govt wouldn't make a big deal about this if US taxpayers were following the rules and paying their legal obligations. The second point is that some people don't want to pay any taxes on money they can hide.

Well said. Also, some people seem to think that the requirement to disclose froeign bank accounts is something new. It's not. It's been around forever. It's stated very clearly in Form 1040 Schedule B. Don't know how anybody could sign their 1040 and not know about it. (Unless they don't use schedule B?)

FATCA, however, is new, and may go through some changes before its (as of now) implementation date of Jan 1 2014.

[gk10002000]

If you have the 800,000 baht in the bank retirement visa, you are $crewed if you hadn't reported it.

That is why so many people are getting second citizenship and passport. Open account with non USA passport.

I doubt that getting a second citizenship relieves you of the USA laws. You could try that defense at your trial. Good luck.

[Heng]

I think the point is that you're maximizing your odds of never getting to trial. It's not like you'd have to 'get away with it' forever either, after a few 'cycles,' who's to say what income came from where?

[jingjoke]

RE: #41 Posted 2011-08-31 19:42:26

…. The retirement money is deposited into my US bank account after the appropriate taxes are withheld. Then periodicaly I transfer money to my Thai bank account for living expenses. So yes I do exceed the 10k threshold. I file my normal tax return and include my earned interest here (though there is no 1099 or equivelant form) And now they want me to report it again so they can figure out another way to tax me. As said before going off the grid and dealing in cash”

Hmm…they, the ever resourceful IRS already have it figured, I hear:

How about the news that our beloved IRS is about to audit all the sworn statements made by fellow Americans in Thailand stating they meet the yearly Baht 8000,000 for a Thai retirement visa, to compare to our declared assets.

That should be fun, even if you think you are off the grid.

Apparently it’s the accruing penalties that sting the most, as time accumulates while one tries explaining that you really didn’t make that declared 800K Baht each year over the past decades.

[flying]

How about the news that our beloved IRS is about to audit all the sworn statements made by fellow Americans in Thailand stating they meet the yearly Baht 8000,000 for a Thai retirement visa, to compare to our declared assets.

Yes that one should be fun for the baht bus riders who use that loophole.

On the one hand they admit they lied & never had the income.... Result deportation

On the other hand they admit they lied to the IRS & had the income....result tax + fines.