Poll: Predict the outcome of the U.S. presidential election (electoral college and after)

[flying]

Suspect that is of little benefit to most of us who use local accounts for local expense as we keep such accounts high enough to more than cover the time period for transfers. Depending on an ATM to make contact was not a pleasant experience in my memory - would much rather have it locally available with multi options to obtain.

True Lopburi & one other thing to take into consideration is exchange rates.

While I know it can go either way I am more comfortable with having a year or two exchanged.

Of course other currencies could strengthen against the Baht but it has been a long time now that they have

not shown great strength

[Pib]

Suspect that is of little benefit to most of us who use local accounts for local expense as we keep such accounts high enough to more than cover the time period for transfers. Depending on an ATM to make contact was not a pleasant experience in my memory - would much rather have it locally available with multi options to obtain.

You can sure keep the bulk of your funds locally/in-Thai bank and still be using your no foreign transaction fee debit card, perferably a Visa debit card that gives a little better exchange rate (plus or minus a few stang of the TT Buying rate used in ACH/SWIFT/wire transfers) card compared to a Mastercard debit card which usually runs about 0.1 baht below the TT Buying rate. Since the daily limit on a debit card is usually around a $1000 (approx 30K baht) just use the ATM to pull the 30K baht and then deposit it in your local Thai bank account. Usually there are no shortage of bank outlets, especially in malls, where there are also plenty of ATM machines. Ex: I go to my local Lotus to pull money using an AEON ATM (just to avoid my bank having to reimburse me the 150 baht fee), and then take about 30 steps to the Bankgok Bank outlet in the mail and deposit the funds in my Bangkok Bank account using their cash deposit machine....absolutely no interface with any bank clerks/paperwork required...takes around 5-7 minutes total from sliding the debit card into the ATM to getting my receipt from the cash deposit machine.....account now recharged...funds now available locally with multiple options to use/obtain. Since we go to this Lotus several times a week there is no special trip made...just part of our frequent Lotus grocery/shopping runs. It's just nice to get the funds in hand immediately and if desired to deposit those funds in your local Thai bank account...no waiting for a funds transfer from the home country to show up in X days. And since I have two no foreign transaction Visa debit cards sometimes I will use both at the same time to pull approx 60K baht, take those 30 steps to Bangkok Bank, and deposit...and if I wanted to I could go do that 24 hours later. I use this method to keep my Thai bank account charged to needed/comfortable levels for Bangkok Bank internet banking & debit card use, but most of my daily cash-in-hand needs will come from my U.S. bank accounts via ATM...I feel my money is more secure in U.S. banks...I don't keep no more in Thailand than I have to. But only doing one or a couple low cost money transfers per year works just fine also. When the transfer costs/fees are low to zero and exchange rate basically the same between funds transfers and ATM usage, it's really just a matter of personal preference I guess. Cheers.

[Koratpat]

Schwab Bank has free ATM usage worldwide. You can use any atm from any bank in the world and it is free, even for that pesky 150 baht fee the Thai banks charge.

Edited April 14, 2012 by Koratpat

[lopburi3]

It is likely easier now than a decade ago when communications to home bank was not available about 20% of the time so you had to make repeated trips/use various ATM's to even get the cash (and believe most ATM limits are in the $500 range) so not much cash per day (and special weekend/holiday restrictions) and the danger of your card either losing its mag strip or being eaten or cloned. Having a joint account got an extra card for that case but that is also an added yearly expense.

As said no one shoe fits all - and expect ATM usage is more reliable than when I used it - but for me don't have an issue keeping a few hundred thousand in local account at a high interest rate than in US.

[Koratpat]

Forget the bank transfers. With Schwab, you just pop on down to the Thai bank atm and withdraw 1000 baht to 20,000 baht and badabing, cash with no fees whatsoever.

[lopburi3]

That does not help much when you have a 300k hospital bill that needs to be paid.

[Koratpat]

That does not help much when you have a 300k hospital bill that needs to be paid.

Actually, you can up the amount of your limits Schwab. But I highly doubt someone in a hospital bed with a 300k hospital bill is popping down to Siam Commercial to do a transfer or use the atm. Anyhow, we are talking about the best bank, not 300k hospital bills.

[Pib]

Suspect that is of little benefit to most of us who use local accounts for local expense as we keep such accounts high enough to more than cover the time period for transfers. Depending on an ATM to make contact was not a pleasant experience in my memory - would much rather have it locally available with multi options to obtain.

True Lopburi & one other thing to take into consideration is exchange rates.

While I know it can go either way I am more comfortable with having a year or two exchanged.

Of course other currencies could strengthen against the Baht but it has been a long time now that they have

not shown great strength

You are definitely right the dollar has not shown any great strength against the baht, especially over the long term. But if a person had done one BIG money wire transfer last year on 12 Apr 11 to last him the whole year he would have got a Bangkok Bank TT Buying rate of 30.01 compared to the today/12 Apr 12 TT Buying rate of 30.67. Or let's say a person does his yearly BIG money transfer at the very beginning of the year...the 4 Jan 11 TT rate was 29.91 and 4 Jan 12 TT rate was 31.26....what will it be in Jan 13--no one knows!! And of course exchange rates between Jan 11 and Apr 12 have been higher and lower than the specific dates mentioned above. Now a person using a no foreign transaction fee debit card doing one withdrawal weekly I expect would average out to have got a very similar exchange rate, possibly within a few stang, to what the BIG money transfer would have got him. But with the associated sending and receiving money transfer fees (even if low) and since the Visa exchange rate is plus/minus a few stang of the TT Buying rate (the times I look it seems to be more on the plus side) I think a person using his no foreign transaction fee debit card would have faired better than the BIG money transfer method. Now a person with a no foreign transaction fee "Mastercard" debit card would probably lose out to the TT Buying rate since the Mastercard exchange rate seems to be on the lower side (just a little) of the TT Buying rate most of the time.

To a degree it's kinda like investing in the stock market...do I make just one BIG investment each year hoping I get lucky with a stock dip on that particular day or do I just do scheduled, monthly investments...some experts say a person will fair better with the latter dollar cost averaging method. Or said another way, it's a crap shoot. Cheers.

[lovetotravel]

That does not help much when you have a 300k hospital bill that needs to be paid.

Or when buying a new car (cash), paying for a house, appliances, etc. Transfers are easy to do and the cash is local. Plus, some of us have to use cash in the bank for our visas!!

[Pib]

Yeap, BIG money transfers have their uses.

[Koratpat]

Plus, some of us have to use cash in the bank for our visas!!

I do not have to have cash in a Thai bank for my visa.

[Koratpat]

Yeap, BIG money transfers have their uses.

Sure, but you have to pay for it. If think if I upped my withdrawal limit to the equivalent of 100k Thai baht a day, I could have 1 million baht in 10 days for FREE - not even the 150 baht Thai fee. But again, this thread is about the best bank rather than taking big money transfers out.

[lovetotravel]

Plus, some of us have to use cash in the bank for our visas!!

I do not have to have cash in a Thai bank for my visa.

Neither do I, but I'm thinking of using the bank method as paying for that notarized paper and waiting for the better part of a day to get it is a pain. Last time, I just missed the local outreach, had to setup an appt in Bangkok, etc. No fun.

[meand]

That does not help much when you have a 300k hospital bill that needs to be paid.

Actually, you can up the amount of your limits Schwab. But I highly doubt someone in a hospital bed with a 300k hospital bill is popping down to Siam Commercial to do a transfer or use the atm. Anyhow, we are talking about the best bank, not 300k hospital bills.

I called Schwab once about a little issue I was having.... the guy mentioned later "would you like to increase your withdrawal limit?". I said "yes, why not." It was that easy. They are good that way.

[Pib]

Yeap, BIG money transfers have their uses.

Sure, but you have to pay for it. If think if I upped my withdrawal limit to the equivalent of 100k Thai baht a day, I could have 1 million baht in 10 days for FREE - not even the 150 baht Thai fee. But again, this thread is about the best bank rather than taking big money transfers out.

Yea, I agree. I too have used both my cards to withdraw approx 60,000 baht per day over X days to plus-up my Thai bank accounts for a planned big buy or need (like having 800,000 in a Thai bank account to qualify for a retirement extension)...and if you have a high daily limit debit card like you mention a person can plus-up accounts real fast with no fees anywhere along the line. Normally I keep my Thai bank accounts in the B400K to B900K range for emergency purposes/retirement extension of stay purposes, with the upper part of that range being reached approx 3 months before retirement extension of stay renewal time. And a healthy part of money stays in a fixed saving account year round currently earning 3.75% to act as an emergency fund and good chunk of the retirement extension of stay income requirement. With each Thai bank account being insured up to B1M as of upcoming mid Aug 12, I feel comfortable enough with this much money staying in Thai banks plus I keep the amount in the right mixture of fixed and regular savings accounts to avoid the 15% tax withholding on an interest amount over B20K. I know I could go through the income tax form filing to recover the taxed amount but I would just prefer to avoid that paperwork effort with the Thai IRS so to speak.

Since Bangkok Bank only charges B100 at their Cheang Wattana, Bangkok branch just below Bangkok Immigration for the income/savings letter immigration wants to see, I now go that route on the same day I go for an extension versus making a trek to the American Embassy and paying $50 (B1500) for an income letter. A B100 fee for a income letter is sure better than a B1500 fee. I keep enough in my accounts to cover emergency cash needs and easy/quick top-up with my debit cards to reach the B800K retirement extension of stay income requirement. If I remember right, I haven't done an ACH funds transfer to Thailand since early 2011 when I got my first no foreign transaction fee debit card, but having that BIG money transfer capability can come in very handy to downright needed sometimes....will vary from person to person in how they handle their finances and what fees they feel OK with.

[JimGant]

plus I keep the amount in the right mixture of fixed and regular savings accounts to avoid the 15% tax withholding on an interest amount over B20K.

Pib, I thought all fixed accounts had 15% withheld on their interest? And that it was only the savings accounts that escaped withholding, as long as their interest didn't exceed 20k?

I've yet to enter the Thai fixed market, but plan to soon, when a USAA CD matures (and the renewal interest rate is a joke, particularly when compared to what I can get in Thailand).

But, I thought I would automatically have 15% withheld on the interest..... Didn't much worry about it, as what I've read says that having it refunded is no hassle (alternatively, you *could* just have the 15% as a tax credit on your 1040. However, this probably would not withstand an audit, as you would have to prove you were obligated to pay this tax, which for 99% of us here, would not be the case).

I have to laugh, 'cause all these numbers I've reported, showing Schwab, and the like, superior to ACH -- still has our walking around money obtained from our local Bangkok Bank by the wife, with her Be1st card, then put in the drawer to be used as needed. This is what she got used to, and I doubt she even knows where her Schwab card is. Since the FX game is a crap shoot, I really haven't cared (plus, the last couple of chunks I've ACHed have been on the fortuitous side of FX -- not that they will be next time....).

And, for major appliances, hospital bills, whatever, we use our USAA Visa credit card. Yes, they pass on the network 1% foreign transaction fee. But they also have a 1% cash back program -- so that neutralizes it, and so we end up about 8 satang ahead of the TT rate. Same as if we'd used our Schwab debit/ATM card, either to get cash, or in the credit POS signature mode.

So far, for me, this has been "good enough." But, I probably should look at Capital One, which doesn't have fees, plus they have a 1-2% cash back program, depending on what you're buying. This certainly overcomes, I believe, the detracting factor that they're MasterCard, not Visa. And, aside from that, the FX factor doesn't enter in on this (as it does for ATM vs.ACH) -- 'cause it would be an either/or situation as to which card to use, with the FX window the same.

Maybe I should get off my duff and look into Cap One (then again, maybe it's "good enough" as it is....).

Oh, are there any Visa credit cards you know about, that have no fees -- and have cash back programs?

Cheers.

[Pib]

Jim,

Based on this post from Daveroc...a Bangkok Bank employee and great contributor on ThaiVisa...it appears you are right about the tax on fixed savings in that it applies to any amount of interest; however, where the tax on interest in regular savings that withholding tax don't kick-in until going over the B20K interest point.

Now to the best of my knowledge I've never had any tax applied to my regular savings account (a joint account) or a direct deposit account (my name only) which I keep a few thousand baht in just to keep the account active if needed in the future. I'll find out about tax on my 11 month fixed savings account (3.75% APY) later this year since it pays the interest at the end of the term vs every six months. On my other savings accounts I get my interest payments in mid Jun and mid Dec of each year...and not aware of tax ever being withheld...and from looking at the thread in above post apparently those folks who do get tax withheld it will show up as an entry in the savings passbook which means you could also see the tax transaction via iBanking. I've never seen such a tax withholding entry in my passbooks.

Maybe if Daveroc is listening in on this thread he could tell us if a tax withholding on interest, whether in a regular savings or fixed savings account, will create a passbook saving entry versus a person needing to go to the bank and ask if any tax has been withheld.

Regarding Uncle Sam/the IRS I just report all my Thai bank interest earned just like it was a U.S. bank and let Uncle have his slice...I've not aware of any provisions that allows me to deduct it....I don't think it falls under foreign income exclusion provisions since interest is classified "unearned" income. See the following IRS link...it shows various items that are considered earned and unearned income under the paragraph titled Earned Income. IRS Pub 54.

I would definitely move out and get a CapOne no foreign transaction fee, no annual fee credit card. Although they no longer offer the 2%/1% cash back card I got early last year, they do have a card that offers 1% cash back on everything and then a yearly 50% bonus on cash back earned...I guess that would average out to around 1.5% cash back over a year but a person would just have wait a year to get the 50% bonus part...the 1% you still get frequently depending on what cash back trigger level you have setup...I have mine setup to payout/applied a credit to my account whenever I reach the $25 cash back point. I've had my CapOne card for around 15 months now, using it whenever possible like for all my Lotus, Big C, Foodland, HomePro, medical, vet, vehicle fuel, restaurant, etc., type buys...in most cases I earned the 2% to include my Chang beer buys at Lotus/Big C (see it pays to drink) and 1% on everything else. Never had a transaction disapproved/blocked and have never had to call CapOne about anything to include notification of using the card outside the U.S. to prevent them from blocking overseas transactions to help prevent fruad. And they gave me a very generous line of credit...more than I need....especially with me just being a retiree (but a handsome one). And I applied and was approved solely over the phone...I tried to apply online but since their online application system did not accept APO addresses I just called their application phone number....about 15 minutes later I was approved (they did run a credit report during that 15 minute application to verify the joint applicaiton) and a card for me and the wife arrived about two weeks later...been using numerous times during every week since. I've lost track of how many $25 cash back credits I've already got...adds up fast when you can use the card for many of your Thailand day-to-day buys like groceries, vehicle fuel, and body fuel (beer), etc. You are right that since the card is a Mastercard if gives a little less exchange rate than if it was a Visa card, but the Mastercard rate is still usually pretty close to the TT Buying Rate...on the credit card usage it sees to average out right around the Sight Bill Buying Rate which is usually 0.1 baht/USD less (approx 0.3% less) than the TT Buying Rate. But when considering at a minumum the Thai bank receiving fees of 0.25% (200 baht min, 500 baht max) for funds transfers which receive the TT Buying Rate and the fact I get 2%/1% cash back, every buy I make with my CapOne credit card effectively makes everything I buy with the card real, real close to 2%/1% cheaper than if I had used cash/Thai debit card and got that cash from an earlier ACH transfer. Yes, Sir, move out and apply for a CapOne cash back credit card.

Regarding your question about Visa credit cards with no foreign transaction fee, I got such a credit card from PenFed....got the PenFed Cash Back Visa credit card (no annual fee also) which pays only 0.25% on everything and 5% on fuel buys at "paid-at-pump" buys...those self service pumps you slide your card into...never seen such a fuel pump machine in Thailand...and I've already used it to buy some fuel as a test and only got the 0.25% cash back since Thai fuel stations use attendants to fill-up your vehicle and process your card payment on a POS machine just like found in stores. I got this card (applied online as their system does accept APO addresses) really as a backup to my CapOne card in case CapOne ever changes its fee/cash back policies.

Cheers,

Pib

(Ex Fee Cash Cow for Banks)

[TallGuyJohninBKK]

Jim and Pib, through their various posts above, have indeed provided a great range of good and accurate banking advice....

Everyone does their banking in a way that works best for their personal circumstances. But just on the basis of dollars and cents alone, the best deal to be had is indeed using a VISA debit card with no foreign currency fee, combined with either a U.S. account like Schwab that reimburses the Thai banks' 150 baht withdrawal fee and/or AEON and CitiBank ATMs that don't charge that fee in the first place.

Except in rare circumstances where someone may have some variety of premium U.S. account that provides totally free and no surcharge international wire transfers, sending domestic U.S. ACHs from a U.S. bank that does them for free to BKK Bank's New York office en route to a BKK Bank account in Thailand is going to be the most cost effective international funds transfer. And as stated above, you can't open an account with BKKB New York. You just use their U.S. ABA/routing number and your BKKB Thai account number for your ACH destination information.

The BKKB/New York method is is not more cost efficient that the VISA/no fee-ATM approach I mention above, although close, but better than the usual variety of international wire transfers done through various U.S. banks to various Thai banks.

As for USAA, I'm a member too, and they're a good financial company that does business in a variety of fields. If someone wants to use their debit card abroad and pay their 1% foreign currency fee, that's their choice. But I see little reason to use a 1% foreign currency fee debit card abroad when there are any variety of no foreign currency fee bank cards available to use, including Schwab, State Farm, Capital One and others mentioned above. And the latter group not only don't charge any FCF, but they also to varying extents reimburse the Thai bank ATM fees if you ever incur them.

As for using ATM withdrawals vs. doing international transfers, it's not an either-or proposition. If I ever had a 300,000 baht hospital bill that wasn't covered by my insurance, I'm already set up to transfer funds easily via the BKK Bank New York branch method, and I wouldn't mind their modest fees for that type of one-time transaction. But for my regular ongoing expenses including rent and such, I use no fee ATM cards in any variety of AEON ATMs, and pay no fees at all.

One thing about AEON and Citibank ATMs is that they're not conveniently located for some people depending on where they live. So in those circumstances, using the Schwab card in any regular Thai bank ATM effectively provides the same value of transaction, since Schwab charges no fees and reimburses the Thai banks' 150 baht fee automatically and without any hassles or things to submit.

Another benefit of keeping one's funds in the U.S., and then pulling them gradually via ATM card withdrawals, is avoiding the extra IRS reporting requirements imposed on expats in any year in which they have $10,000 U.S. or more held in foreign banking institutions. That, along with the much superior fraud/lost card and consumer protections provided by U.S. accounts and cards, compared to virtually non-existent fraud protections provided by Thai banks.

Edited April 15, 2012 by TallGuyJohninBKK

[Pib]

John,

Regarding the Treasury Dept reporting requirement if having the equivalent of $10K (approx B300K) aggregate in a Thai bank for any period during the year (even one second), that don't bother me at all...the form is easy enough to fill out and mail in. Plus, for any U.S. citizen who goes the B400K or B800K in a Thai bank for a marriage or retirement extension of stay they just can't avoid submitting the form year since they exceeded the equivalent of $10K in a foreign bank by having that B400K/B800K in a Thai bank account even for one second during the year. Gets pretty hard to dodge the submission of that Treasury Dept form for many folks since I expect many end-up having the equivalent of $10K in a Thai bank account(s) at some point during each year for a variety of reasons. Preaching to the choir I know. Speaking of that Treasury Dept form I need to get it mailed so it arrives by 30 June...a case of procrastination on my part especially since I've already filed my IRS return and got my refund last month. I'm going to blame my procrastination on Chang beer.

Cheers,

Pib

[phomsanuk]

http://www.rabodirect.co.nz/term-deposits/default.aspx

Schwab Hong Kong ?

[TallGuyJohninBKK]

John,

Regarding the Treasury Dept reporting requirement if having the equivalent of $10K (approx B300K) aggregate in a Thai bank for any period during the year (even one second), that don't bother me at all...the form is easy enough to fill out and mail in. Plus, for any U.S. citizen who goes the B400K or B800K in a Thai bank for a marriage or retirement extension of stay they just can't avoid submitting the form year since they exceeded the equivalent of $10K in a foreign bank by having that B400K/B800K in a Thai bank account even for one second during the year. Gets pretty hard to dodge the submission of that Treasury Dept form for many folks since I expect many end-up having the equivalent of $10K in a Thai bank account(s) at some point during each year for a variety of reasons. Preaching to the choir I know. Speaking of that Treasury Dept form I need to get it mailed so it arrives by 30 June...a case of procrastination on my part especially since I've already filed my IRS return and got my refund last month. I'm going to blame my procrastination on Chang beer.

Cheers,

Pib

Yes Pib... That's right. Unfortunately, a lot of U.S. expats may not be aware of that filing requirement, which is separate and additional from the regular IRS tax filing obligation. And there are potentially very harsh financial penalties for those filing late or failing to file.

Let me also correct slightly what I said above, the trigger for this reporting under the Treasury Department's Foreign Bank Account and Financial Records (FBAR) program is assets or deposits in any foreign accounts (checking, savings, stock, etc.) that combine to exceed $10,000 at any point during the calendar year. The filing is then due typically prior to June 30 of the subsequent calendar year, if I understand these things right.

Then there's the separate issue of what's occurring with FATCA -- the Foreign Account Tax Compliance Act, which is triggered when a U.S. expat has foreign financial assets above certain thresholds depending on their status. That's a new reporting requirement involving a form that is supposed to be filed with one's federal tax returns. But not being one who keeps those kinds of assets abroad, I haven't been keeping up with the latest on the ever-changing implementation of that.

Here's the FATCA thresholds listed on the IRS website:

The aggregate value of your specified foreign financial assets is more than the reporting thresholds that applies to you:

--Unmarried taxpayers living in the US: The total value of your specified foreign financial assets is more than $50,000 on the last day of the tax year or more than $75,000 at any time during the tax year

--Married taxpayers filing a joint income tax return and living in the US: The total value of your specified foreign financial assets is more than $100,000 on the last day of the tax year or more than $150,000 at any time during the tax year

--Married taxpayers filing separate income tax returns and living in the US: The total value of your specified foreign financial assets is more than $50,000 on the last day of the tax year or more than $75,000 at any time during the tax year.

--Taxpayers living abroad. You are a taxpayer living abroad if:

You are a U.S. citizen whose tax home is in a foreign country and you are either a bona fide resident of a foreign country or countries for an uninterrupted period that includes the entire tax year, or

You are a US citizen or resident, who during a period of 12 consecutive months ending in the tax year is physically present in a foreign country or countries at least 330 days.

If you are a taxpayer living abroad you must file if:

You are filing a return other than a joint return and the total value of your specified foreign assets is more than $200,000 on the last day of the tax year or more than $300,000 at any time during the year; or

You are filing a joint return and the value of your specified foreign asset is more than $400,000 on the last day of the tax year or more than $600,000 at any time during the year.

The covered assets under FATCA are:

A specified foreign financial asset is:

--Any financial account maintained by a foreign financial institution, except as indicated above

--Other foreign financial assets held for investment that are not in an account maintained by a US or foreign financial institution, namely:

*Stock or securities issued by someone other than a U.S. person

*Any interest in a foreign entity, and

*Any financial instrument or contract that has as an issuer or counterparty that is other than a U.S. person.

Suffice to say, as someone who uses the consular income letter documentation method for my extensions of stay, I'm perfectly happy not to have to mess with or worry about all that FUBAR stuff!!!

Edited April 15, 2012 by TallGuyJohninBKK

[Pib]

John,

That is indeed a lot of FUBAR stuff ain't it! See what happens when you leave U.S. govt officials setting around with too much time on their hands...just more FURBAR reporting stuff!

But with the exception of the one Treasury Dept form for the $10K requirement, all those other IRS forms and their financial trigger levels are way out of my money league for financial assets in Thailand.

Happy Songkran

Pib

[TallGuyJohninBKK]

Ditto for me on that last point... nowhere near the FATCA threshold for me either.

I guess I had been confused on FATCA in the past...often reading about the $50,000 reporting threshold. But that only applies to U.S. residents -- not those living full-time abroad, whereas the much higher thresholds apply to those living full-time abroad.

Indeed, as I was going through my TurboTax Online stuff today, I got hit with that FATCA related questionnaire for the first time, with the program asking me if I had specified foreign assets is more than $200,000 on the last day of the tax year or more than $300,000 at any time during the year. Fortunately I was able to answer NO.

I'm assuming a foreign bank issued mortgage would count toward that threshold. But I'm not sure how property ownership in one's own name, like a condo, would be treated.

[Pib]

Regarding a mortgage or someone owning their own condo/house in Thailand it doesn't appear to apply. Since we own our home your statement got my curiosity up. But when looking at those IRS FATCAO related forms they are concerned about foreign financial assests/accounts generating income. The closest thing I saw in the form/instructions that someone might briefly wonder if it applies is the reference to foreign estate assests (yea, right, like my modest home could be considered an estate). The IRS definition of a foreign estate is:

(31) Foreign estate or trust

(A) Foreign estate

The term “foreign estate” means an estate the income of which, from sources without the United States which is not effectively connected with the conduct of a trade or business within the United States, is not includible in gross income under subtitle A.

[HLover]

Great post; thanks for the good information on State Farm and Schwaub.

[TallGuyJohninBKK]

Regarding a mortgage or someone owning their own condo/house in Thailand it doesn't appear to apply. Since we own our home your statement got my curiosity up. But when looking at those IRS FATCAO related forms they are concerned about foreign financial assests/accounts generating income. The closest thing I saw in the form/instructions that someone might briefly wonder if it applies is the reference to foreign estate assests (yea, right, like my modest home could be considered an estate). The IRS definition of a foreign estate is:

(31) Foreign estate or trust

(A) Foreign estate

The term “foreign estate” means an estate the income of which, from sources without the United States which is not effectively connected with the conduct of a trade or business within the United States, is not includible in gross income under subtitle A.

Pib, I haven't spent any great time looking into the arcane details of FATCA, since it's not pertinent to my own circumstances.

But as regards people here who may have a foreign mortgage in their name, I was looking at the following item in the FATCA eligible assets:

*Any financial instrument or contract that has as an issuer or counterparty that is other than a U.S. person.

Likewise, I'm wondering if the same concepts would apply under FATCA to those among us who have set up Thai companies, including those established as a vehicle for owning their home among other things.

[Pib]

Way beyond my knowledge or desire to understand this type of talk. Guess it generates more work for financial advisors and lawyers in trying to figure out/translate the IRS language. I just try to follow instructions which are in layman's language, my tax software guidance, etc., and comply with that. Otherwise, Uncle Sam knows my address so he can write me letter on his concerns with my federal tax return and other financial reporting requirements...I doubt he's going to try to put a person in jail or fine him unless there is a major violation of the laws. God Bless Uncle Sam.

[JimGant]

As for USAA, I'm a member too, and they're a good financial company that does business in a variety of fields. If someone wants to use their debit card abroad and pay their 1% foreign currency fee, that's their choice. But I see little reason to use a 1% foreign currency fee debit card abroad when there are any variety of no foreign currency fee bank cards available to use,

John, agree that USAA's 1% fee debit card is a loser, particularly when compared to the Schwab Visa Debit/ATM card. Besides being a MasterCard, it now no longer even has its .5% cashback feature (thanks to the "swipe fee" wars).

But, as I pointed out, I have a USAA Visa credit card, whose 1% cashback feature neutralizes the 1% foreign transaction fee. Thus, I'm getting the same effective rate as I would using my Schwab Debit card (plus all the superiority of a credit card vs. debit card). Now, unless they've moved the goal posts again (sorry to hear the 2% cashback feature is gone, Pib), I guess I'd be somewhat better off with a CapOne MasterCard, since they currently still do have the 1% cashback feature, and they also eat the 1% foreign transaction fee. But factor in the .5% MasterCard penalty in FX rates -- well, I guess I'm stuck at "good enough" for now.

[JimGant]

Regarding Uncle Sam/the IRS I just report all my Thai bank interest earned just like it was a U.S. bank and let Uncle have his slice...I've not aware of any provisions that allows me to deduct it....I don't think it falls under foreign income exclusion provisions since interest is classified "unearned" income. See the following IRS link...it shows various items that are considered earned and unearned income under the paragraph titled Earned Income. IRS Pub 54.

Pib, I was refering to taking a tax credit on Form 1040 for the 15% withheld by the Thais (see Form 1116 instructions). If you didn't (or couldn't) get this refunded at the Amphur, then you'd effectively be double taxed -- which the Tax Code says need not be. Unfortunately, the Tax Code also says that if you're not liable for that tax, no tax credit is allowed.

Thus, getting reimbursed for the 15% withheld credit towards Thai taxes should be the first choice. And, this forum has several reports on how this is done, as I recall.

But, if you like gray areas of tax code, consider this from Thai tax code:

Interest paid to a resident or nonresident individual is subject to a 15% withholding tax and can be considered a final tax in both instances.

What this is referring to is from this fact:

Dividends and interest are taxed at source at a rate of 10% and 15%, respectively. An individual can elect not to report such investment income on the annual personal income tax return for the tax year.

So, Thais in marginal income brackets above 15% take advantage of this -- just treating the 15% withholding as the final tax, not as a withheld credit towards a subsequent income tax return (why pay 37% when you only have to pay 15%).

Anyway, as I say -- if you like gray areas. Just as long as you haven't gotten a refund from the Amphur, taking a tax credit in no way enriches you. So, no jail time. And, hey Mr Auditer, Google lead me to believe I could treat this as a "final tax," not withholding.....

......but, I'd try to get a refund from the Amphur before going this route.

[NaMah]

Jim and Pib, through their various posts above, have indeed provided a great range of good and accurate banking advice....

Everyone does their banking in a way that works best for their personal circumstances. But just on the basis of dollars and cents alone, the best deal to be had is indeed using a VISA debit card with no foreign currency fee, combined with either a U.S. account like Schwab that reimburses the Thai banks' 150 baht withdrawal fee and/or AEON and CitiBank ATMs that don't charge that fee in the first place.

Except in rare circumstances where someone may have some variety of premium U.S. account that provides totally free and no surcharge international wire transfers, sending domestic U.S. ACHs from a U.S. bank that does them for free to BKK Bank's New York office en route to a BKK Bank account in Thailand is going to be the most cost effective international funds transfer. And as stated above, you can't open an account with BKKB New York. You just use their U.S. ABA/routing number and your BKKB Thai account number for your ACH destination information.

The BKKB/New York method is is not more cost efficient that the VISA/no fee-ATM approach I mention above, although close, but better than the usual variety of international wire transfers done through various U.S. banks to various Thai banks.

As for USAA, I'm a member too, and they're a good financial company that does business in a variety of fields. If someone wants to use their debit card abroad and pay their 1% foreign currency fee, that's their choice. But I see little reason to use a 1% foreign currency fee debit card abroad when there are any variety of no foreign currency fee bank cards available to use, including Schwab, State Farm, Capital One and others mentioned above. And the latter group not only don't charge any FCF, but they also to varying extents reimburse the Thai bank ATM fees if you ever incur them.

As for using ATM withdrawals vs. doing international transfers, it's not an either-or proposition. If I ever had a 300,000 baht hospital bill that wasn't covered by my insurance, I'm already set up to transfer funds easily via the BKK Bank New York branch method, and I wouldn't mind their modest fees for that type of one-time transaction. But for my regular ongoing expenses including rent and such, I use no fee ATM cards in any variety of AEON ATMs, and pay no fees at all.

One thing about AEON and Citibank ATMs is that they're not conveniently located for some people depending on where they live. So in those circumstances, using the Schwab card in any regular Thai bank ATM effectively provides the same value of transaction, since Schwab charges no fees and reimburses the Thai banks' 150 baht fee automatically and without any hassles or things to submit.

Another benefit of keeping one's funds in the U.S., and then pulling them gradually via ATM card withdrawals, is avoiding the extra IRS reporting requirements imposed on expats in any year in which they have $10,000 U.S. or more held in foreign banking institutions. That, along with the much superior fraud/lost card and consumer protections provided by U.S. accounts and cards, compared to virtually non-existent fraud protections provided by Thai banks.

Fantastic information supplied in this thread. After I established Schwab linked brokerage/checking accounts I got a Capitol One Platinum credit card with no international transaction fees.

As you've indicated, I was unable to open a Bangkok Bank account with the New York branch because they require an address in Thailand (no P.O. box or Hotel address) so I'll have to wait until I am in-country to set up that account. I might be able to simply use my Schwab ATM card though I'm not clear on how I obtain a retirement Visa without a Thai bank account.