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Re: Leaving US...
Old 01-03-2007, 03:51 PM   #21
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Re: Leaving US...

Quote:
Originally Posted by nun
sorry to bore everyone, foreign tax law is a real cocktail conversation killer......
Not boring me either, since at some point I might return to the UK. Not with the present exchange rate, though!

Peter
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Re: Leaving US...
Old 01-03-2007, 05:55 PM   #22
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Re: Leaving US...

Quote:
Originally Posted by Trek
I did find this: "Furthermore, U.S. law requires those who have more than $10,000 in a foreign trust or bank account to report those accounts on their 1040s." So I don't keep more than $10K in my European bank account.
There is a checkbox on Schedule B to indicate the presence of foreign accounts, and the detailed list of foreign accounts gets reported on Form TD F 90-22.1, which is filed separately from your 1040. Though this alone is no reason to keep your foreign account balance below $10k -- it is just a reporting requirement, and doesn't change your tax liability.

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As you've no doubt gathered this is one of my "pet" interests
One of mine, too!
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Re: Leaving US...
Old 01-03-2007, 06:17 PM   #23
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Re: Leaving US...

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Originally Posted by bpp
There is a checkbox on Schedule B to indicate the presence of foreign accounts, and the detailed list of foreign accounts gets reported on Form TD F 90-22.1, which is filed separately from your 1040. Though this alone is no reason to keep your foreign account balance below $10k -- it is just a reporting requirement, and doesn't change your tax liability.
True, but that account is only a matter of convenience. I just funnel enough into it to pay my local utility bills, taxes, etc. Everything over there is paid via online bank transfer.
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Re: Leaving US...
Old 01-04-2007, 02:33 AM   #24
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Re: Leaving US...

Quote:
you'll probably have to pay tax as a non-resident on any interest.
In my particular case, the state says not to file if your only in-state income is bank interest, but good point to bring up, though, as other states may differ..

I end up doing the $10k+ reporting, because it's not an average balance, it's "at any point" during the year. Since I started out xferring large amounts (home purchase) I ended up filing even though that money left the account within days. Now I'm worried about stopping the reporting and I don't wanna get into a "gotcha" situation in any given year.. it's easier to remember to file than to be anxious about whether my account went from $5000.05 to $10,000.05 after a cash infusion from my brokerage acct.

If they really want to find out what I'm doing, they'll find out anyway.

Good news about the citizenship/tax issues for those "less rich" US ex-pats who may want to go that route..

The wierd thing about domicile is the aspect of "intent". I'd assume it's difficult to prove a current or past intent (as in estate cases) and essentially impossible to prove a future intent. Yet the burden of proof would seem to be on the prospective taxpayer rather than on the taxing authorities..
I can't say that I'm 100% certain I'll spend the rest of my life in Italy. Circumstances could change and I might want to move back when I get old & decrepit. Let's say I move back to State Y (MA).. are they then going to come after me for 30 years of "back taxes"? Not a pretty thought.
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Re: Leaving US...
Old 01-04-2007, 07:21 AM   #25
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Re: Leaving US...

Quote:
Originally Posted by ladelfina

Let's say I move back to State Y (MA).. are they then going to come after me for 30 years of "back taxes"?
Yes they are
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Re: Leaving US...
Old 01-05-2007, 09:57 AM   #26
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Re: Leaving US...

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Originally Posted by Texas Proud


If you do not have a US address, you will have to see if you can keep your Roth at the institute you have it invested. I lived in London for awhile and some of the people would have loved to invest in the US, but places such as Vanguard and Fidelity would not allow them to use a UK address...

don't know about Brazil or UK, but I have had extensive conversations with Fidelity about what happens to my Fidelity accounts (including Roth) when I finally switch my residence from US to Canada. Short answer: they don't care so long as you established the account while in the US. Once you have the account, they will maintain it for you and mail your statements to Canada no problem. And they will not make you switch to Fidelity Canada (thank gawd). DW has a 401b account at Fidelity, and when she changed her residency to Canada a couple of year back, they had no problem changing her mailing address and maintaining the account. On the other hand, Bank of America wouldn't let her keep her Alaska Airline Visa, but made her switch to a Canadian verision. Actually a better deal so long as the Canadian dollar is worth less than the US.

The Roth is another issue since it receives no special tax treatment in Canada. As far as Canada is concerned, it's a taxable brokerage account.

In general, position all your accounts as you want them BEFORE you go abroad. Doing so afterward can be difficult and have tax consequences in the second country. As an example, I was told that, although I can roll my 457 plan into an IRA, if I do it after establishing Canadian tax residency, it is a taxable event.
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Re: Leaving US...
Old 01-05-2007, 01:36 PM   #27
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Re: Leaving US...

bosco,
Have you looked into the US/Canada tax treaty. I know for the US/UK that ROTHs get the save tax advantages in the UK
as in the US.
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Re: Leaving US...
Old 01-06-2007, 10:05 AM   #28
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Re: Leaving US...

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Originally Posted by none
bosco,
Have you looked into the US/Canada tax treaty. I know for the US/UK that ROTHs get the save tax advantages in the UK
as in the US.
yes, I have looked into the tax treaty. It has nothing whatsoever to say about Roths. Since there is no category of money in Canada equivalent to Roths, they are not honoured. Tax-deferred accounts such as traditional IRAs, 401ks, 457s etc. remain tax-deferred in Canada. I confirmed this with a chartered accountant.

The US/Canada tax treaty basically provides that you do not get double-taxed on the first $80,000 of your income (a figure that has no inflation adjustment and hasn't changed in decades). It also spells out how pensions , IRAs etc. get taxed and by whom.

The fact that the US (along with one other country in the world) wants to tax based on citizenship rather than residency is almost enough to make me a (un)fair tax proponent.
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Re: Leaving US...
Old 01-06-2007, 07:26 PM   #29
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Re: Leaving US...

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Originally Posted by ladelfina
I end up doing the $10k+ reporting, because it's not an average balance, it's "at any point" during the year. Since I started out xferring large amounts (home purchase) I ended up filing even though that money left the account within days. Now I'm worried about stopping the reporting and I don't wanna get into a "gotcha" situation in any given year..
Mine was over $10K once, that was for the purchase of my apartment.
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Re: Leaving US...
Old 01-07-2007, 05:35 AM   #30
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Re: Leaving US...

Trek, the reporting is sent to a different place (Dep't. of Treasury rather than straight to the IRS), and from what I can tell it's wrapped up in Homeland Security and anti-money-laundering stuff.

Let's say it WERE about the tax liability and you overlooked the €10 in interest that your €10,000 account yielded that year.. do you think the penalities would be anything like THIS:

Quote:
Failure to File Penalty – up to $250,000 and/or up to 5 years in prison for any person "willfully violating" the requirements to file. (31 CFR 5322a penalty)

Fraud Penalty – up to $500,000 and/or up to 10 years in prison for any person "willfully violating" the requirements to file "as part of a pattern of any illegal activity involving more than $100,000 in a 12-month period." (31 CFR 5322b penalty)

False Information Penalty – fine or up to 5 years in prison for any person providing false, misleading, fictitious, or fraudulent statements on TD F 90-22.1; or up to 8 years in prison if the false information involves domestic or foreign terrorism. (18 CFR 1001 penalty)
I get the impression they are pretty serious, or at least want to appear that way, so I just do the filing!
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Re: Leaving US...
Old 01-07-2007, 12:54 PM   #31
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Re: Leaving US...

I have an account here in Canada that pops over $10k a couple of times a year because I have to save up to pay taxes.

I ALWAYS report it and would advise trek to do so, too. The IRS has a BIG hammer and is worse than inflexible according to rumour.
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Re: Leaving US...
Old 01-07-2007, 08:30 PM   #32
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Re: Leaving US...

Ok, I'm convinced.
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Re: Leaving US...
Old 01-08-2007, 09:40 AM   #33
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Re: Leaving US...

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Originally Posted by Ed_The_Gypsy

I ALWAYS report it and would advise trek to do so, too. The IRS has a BIG hammer and is worse than inflexible according to rumour.
I agree--I always report mine. Otherwise I'm afraid they will take it and use it to buy me a one way ticket to Guantanamo.

BTW, while you are sitting in Canada amassing accounts > $10,000, don't forget to not smoke Cuban cigars. Yes, that's right--even though they are legal in Canada, it is against the law for a US citizen to smoke Cuban cigars even while they are somewhere else where it is legal

Sort of like the "tax you in the US even when you don't live there" philosophy. God bless America!!
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Re: Leaving US...
Old 01-08-2007, 11:43 PM   #34
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Re: Leaving US...

It should be against the law for an American to smoke anything, anywhere.

Ed (Born-again non-smoker) in Calgary
where they FINALLY banned smoking in bars and other public places.

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Re: Leaving US...
Old 01-09-2007, 09:45 AM   #35
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Re: Leaving US...

Quote:
Originally Posted by Ed_The_Gypsy
It should be against the law for an American to smoke anything, anywhere.

Ed (Born-again non-smoker) in Calgary
where they FINALLY banned smoking in bars and other public places.

that's good news--is it all Alberta or just Calgary?

I'm all for smoking bans in public places. I just think governments should confine their laws to the boundaries of real estate that they actually have jurisdiction over.
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Re: Leaving US...
Old 01-10-2007, 12:41 AM   #36
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Re: Leaving US...

Edmonton went no-smoking about two years ago. It is city-by-city.

Ain't never going to get Fort McMurray to go non-smoking, though. They would have to have a Mounty on every corner 24-7. (If they could find that many Mounties who don't smoke.) (Ft Mac doesn't have a police force of its own. They contract it out to the RCMP.)

I have two beefs with Canadians:
1) They smoke--even the doctors. There are hospitals in Canada that allow smoking.
2) They trust their government.

The Danes have the same handicaps.

I love both countries, but, Dammit, stop smoking!
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Re: Leaving US...
Old 01-10-2007, 10:14 AM   #37
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Re: Leaving US...

true, a lot of Canadians seem to smoke. But more places are smoke-free. At least by comparison to Alaska.

most Canadians I know don't trust the government much. I must run with an atypical crowd. There's a lot of guns buried in back yards in western Canada, especially in the Yukon.
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Re: Leaving US...
Old 01-10-2007, 10:17 AM   #38
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Re: Leaving US...

Cuban cigar bar in Tallinn. I'll be sure not to stray to near.

http://www.havanas.ee/index.php?lang=eng (English version)
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Re: Leaving US...
Old 01-10-2007, 04:09 PM   #39
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Re: Leaving US...

Is anyone getting SS in a foreign country, if so, is it only taxed in your counrty of residence?
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Re: Leaving US...
Old 01-10-2007, 07:30 PM   #40
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Re: Leaving US...

Quote:
Originally Posted by bosco
true, a lot of Canadians seem to smoke. But more places are smoke-free. At least by comparison to Alaska.

most Canadians I know don't trust the government much. I must run with an atypical crowd. There's a lot of guns buried in back yards in western Canada, especially in the Yukon.
Smokers are mostly cowboys and Quebecois. Nobody trusts the government. We have allowed them to do some things that we now regret but fortunately our government lacks the financial resources to really screw up on the world stage.

Keithey Canuck
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