Taxation is not a real problem. It does not matter where you live, as a US citizen you have to declare golbal income. I live and work in the US,but I have income from outside the US. As long as I have paid taxes according to the tax laws of the country where the income is generated, I am not taxed on that income in the US. For example, there is no tax on dividends in India and capital gains tax is 10%, I have to just show that those taxes were paid in my US tax return and get a tax return from my accountant in India. same for rental income etc., The US has these tax treaties with many nations.
What are advantages and disadvantages of USA citizenship
- Thread starter bkhote
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Taxation is actually considerably more complex than you suggest. For one thing, the rules are totally different for US citizens and permanent residents who live in the US but have foreign income and, for US citizens that live in another country and have income from that country. In the former case (which covers your situation) then provided the US has a tax treaty with the country where the income is earned, it is possible to deduct the lessor of the actual tax paid in the foreign country or the tax that would be due if the income had been earned in the US from the US tax due including all worldwide income (i.e. tax due shown on 1040). Essentially, this prevents double-taxation but at the same time stops you profiting if the source country's tax rate is higher than that of the US. If there is no tax treaty then typically the best that can be done is to deduct the foreign tax paid from your reported worldwide gross income, but this still means you are double-taxed to an extent.
TheRealCanadian
Volunteer Moderator
Unless there's a specific tax treaty provision where the US has waived its right to tax this income, I'd be really leery of relying on this.
It doesn't matter what the foreign country taxes income at. It needs to be declared, and depending on the tax credits you get, the US may get their cut too.
Absolutely. That's why I replied to 'schandrag' saying that it's not as simple as he makes out. Indeed, re-reading what he wrote, I think he may be underpaying his US tax. Dividends may not be taxed in India and capital gains tax may be at a lower rate, but according to the IRS: "A resident alien's income is generally subject to tax in the same manner as a U.S. citizen. If you are a resident alien, you must report all interest, dividends, wages, or other compensation for services, income from rental property or royalties, and other types of income on your U.S. tax return. You must report these amounts whether from sources within or outside the United States.". The only way to correctly calculate the amount of tax owed to Uncle Sam is to complete IRS form 1116 (and read publication 514 which explains everything).
TheRealCanadian
Volunteer Moderator
One other thing to note is that all foreign accounts with a value of $10,000 US at any time during the year need to be declared to the US Treasury via form TD-90.22 (iirc).
Failure to declare these accounts make them subject to forfeiture.
Failure to declare these accounts make them subject to forfeiture.
I am aware of the IRS rules and the reporting requirements for accounts over $10,000. The point I was trying to make is that the US has tax treaties with many countries and as a result of these, income is not subject to dual taxation.
No, I have not underpaid my taxes. I was audited and cleared for my 2007 taxes( it was a random audit).
Anyway discussion on capital gains is not germane for this year!
No, I have not underpaid my taxes. I was audited and cleared for my 2007 taxes( it was a random audit).
Anyway discussion on capital gains is not germane for this year!
Advantages:
1. Consular protection.
2. Better social security treatment when out of country for certain nationalities. This is vital as retiring in a cheaper place is an option for lot of people.
3. The usual. (eg. ability to sponsor elderly parents, not live under the fear of deportation for any reason).
1. Consular protection.
2. Better social security treatment when out of country for certain nationalities. This is vital as retiring in a cheaper place is an option for lot of people.
3. The usual. (eg. ability to sponsor elderly parents, not live under the fear of deportation for any reason).
TheRealCanadian
Volunteer Moderator
With health care the way it is in America, I'm puzzled as to why this would be seen as a viable option. Private health care is very expensive.
True. Maybe some folks can afford it (I sure cannot). The way I see it, is to go the route of LPR/I-407/B1-B2 and once the parents are on temporary basis, visitor insurance/short term insurance is a viable option.
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Well,
there is one advantage I can think of that really is one (at least for a lot of us). The USA has with most countries Social Security Agreements, meaning that if you work in the US and return to your home country, you get paid social security when you retire. The little pitfall is that you ONLY get it when you live in your native country OR your are US citizen. Now as a EU citizen nothing would keep me from living in Italy when I want to retire - problem is, it's not my native country, alas no US social security.
As a German/US citizen (dual citizenship) I don't have that problem.
Further, for inheritance I don't need to establish a trust once US citizen.
Third, I can apply for jobs where US citizenship is required.
It's been actually the first and second one that made me apply, the third is more a reason to keep the German citizenship.
there is one advantage I can think of that really is one (at least for a lot of us). The USA has with most countries Social Security Agreements, meaning that if you work in the US and return to your home country, you get paid social security when you retire. The little pitfall is that you ONLY get it when you live in your native country OR your are US citizen. Now as a EU citizen nothing would keep me from living in Italy when I want to retire - problem is, it's not my native country, alas no US social security.
As a German/US citizen (dual citizenship) I don't have that problem.
Further, for inheritance I don't need to establish a trust once US citizen.
Third, I can apply for jobs where US citizenship is required.
It's been actually the first and second one that made me apply, the third is more a reason to keep the German citizenship.
I thought Germany didn't allow dual citizenship. Did they recently change that?
Can you please clarify this? You will be able to work in Western Europe as USC - with NO limitation?! Since when? I might be missing something.
I know that you can visit Western Europe as USC up to 90 days with no visa - but I am not sure that you can work as well?!
Mr Vertigo
Registered Users (C)
Through his Italian citizenship.
Oooo... I see. Thank you. He/she should correct post... as USC can not work in Western Europe without obtaining first work visa.
Advantage:
Shorter lines at cross border in EU. There are lines for EU citizens (90% of people arriving) and ALL passports and I always go with US passport, so its faster for me to go thru. I have also EU passport.
When you got ticket in the EU I always show US docs, so my EU driver license doesnt get points
Shorter lines at cross border in EU. There are lines for EU citizens (90% of people arriving) and ALL passports and I always go with US passport, so its faster for me to go thru. I have also EU passport.
When you got ticket in the EU I always show US docs, so my EU driver license doesnt get points
sarrebal,
yep, Germany now has a dual citizenship provision. Without it, I wouldn't have done the N-400. Specifically because of you give up German citizenship you also loose all benefits you may have piled up in the past. Further, EU citizenship has great other benefits for living/work anyhere even after retirement.
However, you need to FIRST apply to keep your German citizenship (ties to Germany, language, bank account, property are reasons). Only AFTER they give the go ahead you can apply for another citizenship (only exception are most EU countries)
yep, Germany now has a dual citizenship provision. Without it, I wouldn't have done the N-400. Specifically because of you give up German citizenship you also loose all benefits you may have piled up in the past. Further, EU citizenship has great other benefits for living/work anyhere even after retirement.
However, you need to FIRST apply to keep your German citizenship (ties to Germany, language, bank account, property are reasons). Only AFTER they give the go ahead you can apply for another citizenship (only exception are most EU countries)
harvydonald
Registered Users (C)
I know that law is true for US. Is it true for EU also?