I don't know how this affects Retirees here but it sure sounds like a great pain in the a..... New U.S. Tax Regime is "Devastating," Experts Say
It's not that hard to work around it, simply close all bank accounts and businesses, put everything you own in someone elses name, and renounce US citizenship, which is highly overrated anyway. Under this new tax law even Americans who have never set foot in the US will have their foreign and domestic bank accounts tapped by Uncle Sam. Being an American is not as glorious as it once was. The wealthy and upper middle class are renouncing their US citizenship at an unforeseen rate. Larry
I was just reading about Americans renouncing their citizenship in record numbers. Meanwhile I'm considering just operating out of a shoe box here.
I can only see this as a problem for folks with $50,000 or more, squandered away. Personally, I believe it is aimed to go after people hiding money overseas to avoid paying taxes, which has been a problem for a very long time. We don't have that kind if money, so it won't affect us.
Larry .. I will put it in a lady's shoe box and know one will know it's mine redneck .. I did a very brief search earlier and from the sounds of it this is one more FUBARed IRS law that even the tax professionals are having a hard time with... anyway I'm not hiding money here I'm spending it so maybe it won't effect me lol
This law has been in effect for a few years now. In short, this is how it affects anyone: $97,600 of your income derived from a foreign source while living permanently in a foreign country is exempt from income tax. (The test for "permanent residency") can be found here: Foreign Earned Income Exclusion - Bona Fide Residence Test You must file with the IRS if your income exceeds these amounts: Single: $9,740 / Head of Household w/ Dependent: $12,500 / Married filing Jointly: $19,500 / Married filing Separately from Spouse: $3,800 You must file Form 2555 to claim the foreign earned income exclusion. Instructions and requirements are here: http://www.irs.gov/pub/irs-pdf/i2555.pdf You must file Form 8938 if you have $50,000 in foreign owned financial assets. This would be assets that you derive an income from, such as equipment in your restaurant or store. This does not include assets such as home, car, furniture, etc. This is cash or business related assets. You do not have to file this form if you would otherwise not need to file income taxes. (See income filing threshold above) Instructions and requirements are here: http://www.irs.gov/pub/irs-pdf/f8938.pdf You must file FINCEN reporting if your bank accounts in foreign banks exceed $10,000 total for all accounts. See instructions and requirements here: Report of Foreign Bank and Financial Accounts (FBAR) Also, please remember...filing is NOT owing! The test of permanent residency abroad insures that you are exempt from any taxes on the first $97,600 of your income. If you own a business, you don't own the land, you might own the building and fixtures, but probably not; depending on your paperwork. As it is not YOUR business, how can you show an income other than as an employee? What is your wife paying you?
Larry_H it sounds like the IRS gave birth to this abortion that lived in 2010 (can't blame Bush for this one) and portions are still being implemented. Whether one has to pay or not it still sounds like a bunch of paperwork will be required and many banks may decide to pull the plug on foreigners. Tax Law - Simpson Grierson
True enough, ex231. Some Phils banks started refusing accounts for USC's back in 2011. I'm told that BoC still welcomes USC accounts and has no problem with reporting and conforming to the IRS/UST requirements. They have people that are well-versed in the do's and don't's and can assist in setting up accounts that will conform as well as types of accounts that are exempt from this reporting. Is there a Bank of China branch in Duma?
Best Bank in town, China Bank, had no problems with them since the beginning, but I withdraw US$ and change them elsewhere, not at their branch though...
