A language learners’ forum

whatiftheblog wrote: You don't even need to be out of the workforce during that time period - I plan to continue freelancing for US clients (first $90k tax-free!) and maybe picking up a part-time job straight off the bat while there.

Be careful, double check that. The US taxes its citizens while abroad. And where you live is where you are tax resident, so depending on taxation agreements you'll maybe be able to submit foreign taxes paid to reduce US tax burden. 90k tax free is too good to be true. I've earned in the US and EU in years that I lived in Germany and in years that I've lived in the US; someone's getting tax money somewhere.

Systematiker wrote:

whatiftheblog wrote: You don't even need to be out of the workforce during that time period - I plan to continue freelancing for US clients (first $90k tax-free!) and maybe picking up a part-time job straight off the bat while there.

Be careful, double check that. The US taxes its citizens while abroad. And where you live is where you are tax resident, so depending on taxation agreements you'll maybe be able to submit foreign taxes paid to reduce US tax burden. 90k tax free is too good to be true. I've earned in the US and EU in years that I lived in Germany and in years that I've lived in the US; someone's getting tax money somewhere.

There's a poorly publicized IRS program called the Foreign Earned Income Exclusion. You were absolutely right in telling me to double-check, though, because it's not $90k, it's now higher, adjusted for inflation! You have to be physically outside of the US for at least 330 days a year and establish a "tax home" in a foreign country. I don't think this serves as an exemption from FICA tax, though.

Here's an overview: https://www.irs.gov/individuals/interna ... -exclusion
Here are the requirements: https://www.irs.gov/individuals/interna ... quirements

It requires some finagling to get everything right, for sure, and I still haven't fully compared this setup to the non-financial benefits of registering as self-employed in France, but it does work. My friends and colleagues who work overseas all make use of this.

Systematiker wrote:

whatiftheblog wrote: You don't even need to be out of the workforce during that time period - I plan to continue freelancing for US clients (first $90k tax-free!) and maybe picking up a part-time job straight off the bat while there.

Be careful, double check that. The US taxes its citizens while abroad. And where you live is where you are tax resident, so depending on taxation agreements you'll maybe be able to submit foreign taxes paid to reduce US tax burden. 90k tax free is too good to be true. I've earned in the US and EU in years that I lived in Germany and in years that I've lived in the US; someone's getting tax money somewhere.

The US basically forces ex-pats to pay double taxes if you are an ex-pat living and working abroad. It's forcing many to decide to give up their US citizenship. The BBC had an article on this earlier in the year:

http://www.bbc.com/news/35383435

whatiftheblog wrote:

Systematiker wrote:

whatiftheblog wrote: You don't even need to be out of the workforce during that time period - I plan to continue freelancing for US clients (first $90k tax-free!) and maybe picking up a part-time job straight off the bat while there.

Be careful, double check that. The US taxes its citizens while abroad. And where you live is where you are tax resident, so depending on taxation agreements you'll maybe be able to submit foreign taxes paid to reduce US tax burden. 90k tax free is too good to be true. I've earned in the US and EU in years that I lived in Germany and in years that I've lived in the US; someone's getting tax money somewhere.

There's a poorly publicized IRS program called the Foreign Earned Income Exclusion. You were absolutely right in telling me to double-check, though, because it's not $90k, it's now higher, adjusted for inflation! You have to be physically outside of the US for at least 330 days a year and establish a "tax home" in a foreign country. I don't think this serves as an exemption from FICA tax, though.

Here's an overview: https://www.irs.gov/individuals/interna ... -exclusion
Here are the requirements: https://www.irs.gov/individuals/interna ... quirements

It requires some finagling to get everything right, for sure, and I still haven't fully compared this setup to the non-financial benefits of registering as self-employed in France, but it does work. My friends and colleagues who work overseas all make use of this.

You're tax resident in France then. So you should be paying French tax. If you are paying no tax, you're evading tax (even work done for US clients; you pay tax where you are tax resident).

Some countries have taxation agreements with the US, Germany is one of them. I don't know about France. But I guarantee there is not a magical loophole where you pay no tax just because you are an expat.

Systematiker wrote:You're tax resident in France then. So you should be paying French tax. If you are paying no tax, you're evading tax (even work done for US clients; you pay tax where you are tax resident).

Some countries have taxation agreements with the US, Germany is one of them. I don't know about France. But I guarantee there is not a magical loophole where you pay no tax just because you are an expat.

Never meant to say there was in the case of France specifically; should have clarified that I mean tax-free in the US, apologies for the confusion. I'm particularly touchy about US taxes specifically because I'm formally an independent contractor, so we get taxed out the wazoo, penalized for additional earned income, and forced to spend ages wading through arcane filing systems. I'm probably even more wound up than the average US taxpayer because I live in DC, so I have no representation at the federal level, no functional benefits of a progressive fiscal system (nearly everything we have is of terrible quality), and sure, the Smithsonian's great and all, but... (I hope this doesn't violate the ban on political talk. It's a national tragedy shared by all of us, regardless of political leanings.)

If I were to register as self-employed in France, my tax burden would be much lower and my disposable income much higher, since my fixed costs would be significantly lower as well.

Sgt Schultz wrote:
The US basically forces ex-pats to pay double taxes if you are an ex-pat living and working abroad. It's forcing many to decide to give up their US citizenship. The BBC had an article on this earlier in the year:

http://www.bbc.com/news/35383435

To add to that, I found this link: http://www.expatinfodesk.com/expat-guide/nationality-specific-information/americans/us-tax-liability/

It sounds like if you make less than 100,000$ a year, and don't have savings, then you're fine. Obviously if you want savings, then you should do something to change that.

Now when I think of immigrating, I'm thinking of renouncing the old country and trying to become a citizen in the new: is that an odd way of thinking? Judging by the Sargent's link, Americans will work in foreign countries for years, and never give up their American citizenship. I would assume that if I was living somewhere else for great lengths of time, I would be more invested in that country than the old one, and try to integrate as much as possible.

Regarding self-employed, my dad is self employed, and I can understand why he married an accountant. He keeps every receipt pertaining to his business so he can ask for tax deductions. What a mess.

I'm curious how substantial gains from Patreon or Ebay work if you are an expat? Do you only pay American taxes on that, or taxes from both countries?

whatiftheblog wrote:

Systematiker wrote:You're tax resident in France then. So you should be paying French tax. If you are paying no tax, you're evading tax (even work done for US clients; you pay tax where you are tax resident).

Some countries have taxation agreements with the US, Germany is one of them. I don't know about France. But I guarantee there is not a magical loophole where you pay no tax just because you are an expat.

Never meant to say there was in the case of France specifically; should have clarified that I mean tax-free in the US, apologies for the confusion. I'm particularly touchy about US taxes specifically because I'm formally an independent contractor, so we get taxed out the wazoo, penalized for additional earned income, and forced to spend ages wading through arcane filing systems. I'm probably even more wound up than the average US taxpayer because I live in DC, so I have no representation at the federal level, no functional benefits of a progressive fiscal system (nearly everything we have is of terrible quality), and sure, the Smithsonian's great and all, but... (I hope this doesn't violate the ban on political talk. It's a national tragedy shared by all of us, regardless of political leanings.)

If I were to register as self-employed in France, my tax burden would be much lower and my disposable income much higher, since my fixed costs would be significantly lower as well.

Right, then I misread you initially.

I totally get it, by the way - I get taxed as self-employed as well, and have multiple streams, plus with foreign income every year...

I would also like to point out, because I don't remember how explicitly it has been in this thread, immigrating is going to be exponentially harder if you have one (or many) chronic medical condition and even harder or in some cases impossible if you can't work because of said medical condition(s).