American expats ... not much love from our own government

[NeverSure]

I absolutely agree. The USA and most if not all of the states don't handle it well. Just try keeping a state as your residence while living abroad. Try getting auto insurance while living abroad if not "maintaining" a US presence properly. Try keeping a State issued driver's license, etc. Taxes, and Ocamacare exemption, and USA address issues, etc. All a big huge pain in the arse, and a lot because of suspected criminal activities done by others.

I don't blame a state for not allowing someone to claim residency if they don't live there, LOL....

As far as I know, it may still be that S. Dakota still affirmatively allows people to claim residence if they don't live there. They have no state income tax. Try this. They can provide residency, to get a driver's license and mail forwarding, so a lot of people claim.

http://mydakotaaddress.com/

[BKKSnowBird]

Some states like CA and VA will do nothing for you but will not release you as a resident for tax purposes.

[JimGant]

Some states like CA and VA will do nothing for you but will not release you as a resident for tax purposes.

Yes, Virginia has been cited for holding on to its former residents who don't establish residence in another state. However, the Virginia Tax Commissioner has ruled this interpretation by lesser clerks is in error, and, indeed, you as an expat can sever your Virginia relationship. But, just don't renew your driver's license. See article 34: http://www.thaivisa.com/forum/topic/815102-some-practical-info-on-getting-a-us-state-residency-if-you-need-one/page-2

So those of us from the 41 states with income tax *do* get tax relieve when we expatriate. Which we can now use to pay VAT.......

[up-country_sinclair]

Being an American living abroad is a rather easy existence, and I for one have always been fairly treated by US embassies and consulates around the globe. Yes filing taxes and the FACTA is a bit of nuisance, but most people can complete them in a couple of hours on one day per year. The bottom line is that some people are just perpetual victims and will find any reason under the sun to convince themselves (and any one within earshot) that they're being persecuted. And that's the simple truth.

[JimGant]

Yes filing taxes and the FACTA is a bit of nuisance

But, that's not unique to being an expat..... you'd be paying taxes on the same income, and filling out the same Form 1040, if you resided in the US. Plus, as mentioned previously, your FATCA filing (Form 8938) isn't required for expats (vs. US residents) until the $200k threshold is reached ($400k married) -- vs. $50k/$100k for US residents -- a four fold difference.

And why shouldn't my Air Force pension be taxed by the US? After all it's being funded by appropriations paid by US taxpayers. Makes sense that (to me, anyhow) I should be subject to tax regardless of where I park my butt.

And it becomes even clearer with taxation on my 401(k) and IRA payouts. These were funded by tax deferred payments -- not tax EXEMPT payments. Uncle Sam gave me many years to grow my funds tax deferred -- but he eventually wanted (and would get) this money taxed (and sooner rather than later, as I found out turning 70, and being subject to Required Minimum Distribution). Again, it makes no sense that I should get a "walk" in taxation because I expatriated.

So the whole "pay taxes on all worldwide income" becomes sort of a joke when your worldwide income consists entirely of US derived income -- plus a few hundred bucks of interest on Thai savings accounts -- which otherwise would be earning less in a US bank.

Yeah, the expat really suffers under this "worldwide income" policy.

[usnftcret]

Yes filing taxes and the FACTA is a bit of nuisance

But, that's not unique to being an expat..... you'd be paying taxes on the same income, and filling out the same Form 1040, if you resided in the US. Plus, as mentioned previously, your FATCA filing (Form 8938) isn't required for expats (vs. US residents) until the $200k threshold is reached ($400k married) -- vs. $50k/$100k for US residents -- a four fold difference.

And why shouldn't my Air Force pension be taxed by the US? After all it's being funded by appropriations paid by US taxpayers. Makes sense that (to me, anyhow) I should be subject to tax regardless of where I park my butt.

And it becomes even clearer with taxation on my 401(k) and IRA payouts. These were funded by tax deferred payments -- not tax EXEMPT payments. Uncle Sam gave me many years to grow my funds tax deferred -- but he eventually wanted (and would get) this money taxed (and sooner rather than later, as I found out turning 70, and being subject to Required Minimum Distribution). Again, it makes no sense that I should get a "walk" in taxation because I expatriated.

So the whole "pay taxes on all worldwide income" becomes sort of a joke when your worldwide income consists entirely of US derived income -- plus a few hundred bucks of interest on Thai savings accounts -- which otherwise would be earning less in a US bank.

Yeah, the expat really suffers under this "worldwide income" policy.

Well said Jim!

[NancyL]

I'm in a position to see what various embassies and consulates do to help their elderly expats in need and I've got to say I'm really pleased my ancestors had the good sense to climb aboard those boats to cross the Atlantic Ocean. If we're truly in trouble, we're helped and while it may not seem like it, we receive assistance W-A-Y faster than people from other countries. Plus, we can continue to vote and our Embassy/Consulate makes it easy for us to do so. And lets not forget the ease with which we can continue to receive our Social Security pensions and COLAs, no questions asked about living overseas.

I just shake my head in amazement listening to my Aussie friends discuss the games they have to play with "Centrelink" -- something about having to live in Australia for two years right after they start their pension. I don't quite understand it. Some of them seem to work around this requirement. And then there are the Brits with their "frozen" pensions. Again, some somehow manage to work around that and others don't. Good thing we don't have to play games to get what we worked so many years to earn. I don't mind spending a few hours every year to calculate a few hundred dollars for income tax to go to Uncle Sam.

Edited May 30, 2015 by NancyL

[gk10002000]

Some states like CA and VA will do nothing for you but will not release you as a resident for tax purposes.

New Mexico is like that. I worked there several times. Their paperwork starts out with a long diatribe about how hard it is to change a state residency for tax purposes, yet if you set foot in their state, they basically try to make you a state resident for tax purposes very quickly. Very two faced.

[gk10002000]

I absolutely agree. The USA and most if not all of the states don't handle it well. Just try keeping a state as your residence while living abroad. Try getting auto insurance while living abroad if not "maintaining" a US presence properly. Try keeping a State issued driver's license, etc. Taxes, and Ocamacare exemption, and USA address issues, etc. All a big huge pain in the arse, and a lot because of suspected criminal activities done by others.

I don't blame a state for not allowing someone to claim residency if they don't live there, LOL....

As far as I know, it may still be that S. Dakota still affirmatively allows people to claim residence if they don't live there. They have no state income tax. Try this. They can provide residency, to get a driver's license and mail forwarding, so a lot of people claim.

http://mydakotaaddress.com/

Oh I agree that state residency can be abused. But since the USA is made up of individual states, the USA doesn't handle interstate stuff well. If one travels all over, stays with friends, lives abroad, is a literal nomad, or itinerant, things don't go well. What address to use on your income tax? What driver license to get or keep? You couldn't keep up with all the changes if you followed to the letter what many states decree, 30 days in state get a new license.