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??? Do you have to pay income tax if you live in another country?

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2Design Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-29-04 09:41 AM
Original message
??? Do you have to pay income tax if you live in another country?
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cosmicaug Donating Member (676 posts) Send PM | Profile | Ignore Sun Aug-29-04 09:56 AM
Response to Original message
1. It depends.
28erl wrote:
Do you have to pay income tax if you live in another country?

I believe it depends. There's such a thing as foreign income exclusion which could, as its name indicates, exclude foreign income from U.S. federal income taxation.

See, for instance, http://www.irs.gov/faqs/faq13-3.html & http://www.irs.gov/taxtopics/tc853.html and read the I.R.S..
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LiberalVoice Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-29-04 09:57 AM
Response to Reply #1
2. What about...
"No taxation without representation?" I'm curious..
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LanternWaste Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-29-04 10:26 AM
Response to Reply #2
6. I would think that you are represented...
I live in Cancun, MX and continue to vote (and will in Nov. :) ) and consider my interests represented on the local, state and national levels (regardless of whether I agree with the representations made in my name as a constituent).

I would think that as long as you hold on to your U.S. citizenship, you continue to be represented.

As to the original poster, I know a few Anglo's here that have played the system and do not pay taxes, but there's a *lot* of paperwork you have to do and you'd need to know the visa system pretty well to accomplish it. Yes... it is possible (but I honestly don't know if it's completely legal or not).
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LiberalVoice Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-29-04 10:28 AM
Response to Reply #6
7. Thats bullshit!
You wouldn't catch me paying american taxes if I didn't live in the country.
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LanternWaste Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-29-04 10:35 AM
Response to Reply #7
9. Maybe it is...
Maybe it is horse-hocky.

As for me, I believe that I as long as I'm an American citizen, I'm still responsible (regardless of how small a part) for the maintenance and direction of my country.
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LiberalVoice Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-29-04 10:38 AM
Response to Reply #9
10. If I could I would denounce my citizenship and just wander the planet.
My allegiance to this country in the last four years has gone from "go America" to "Fuck America".
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LanternWaste Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-29-04 11:09 AM
Response to Reply #10
13. I completely understand
I completely understand. I have many friends who feel the same way. My opinion is that the past four years have illustrated to me how much work we as citizens have in front of us to re-establish a just and noble government.

In other words, the smaller the amount of honor held by the governing bodies, the greater responsibility we have to attempt change the leadership and prevent abuses of/by the system.

But again, I realize (as we all do) that watching a (relatively) distinguished country based on (if not actually using) equality and freedom slowly denigrating itself is a difficult and depressing proposition. x(
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2Design Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-29-04 10:46 AM
Response to Reply #6
11. how complicated is it to live in another country and work there?
As far as the tax, not looking to get around the system....but it would seem if you are not living in the usa, then you would not pay the taxes.

So if I am collecting SS, I am taxed on that. But if I am earning money in the new country and I am a resident, I may have exclusions.

What benefits does mexico give its residents? What is involved?

Do you get health benefits like in many european countries and canada?

Looking for a country where my health benefits would be paid for in exchange for working in the country.

Want a country that is run for the people and not for the corporations.

Unless usa starts turning around and being for the people, our tax money only supports the government and congress employees for their retirement and health and leaves very little for the rest of us. Right now usa supports corporations that live offshore but they get huge tax benefits. And as kerry and edwards said they have great benefits being part time congress people ....like the rest of the part time congress people... and the people get very little....

I don't mind paying taxes if they go for the good of the whole but right now that is not the case.
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LanternWaste Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-29-04 11:39 AM
Response to Reply #11
15. Somewhat complicated if you don't know what you're doing...
There's a certain amount of complication as to getting your FM3 processed. I had absolutely no idea what I was getting myself into and stood in day-long lines at the immigration office in Cancun, paid fee's twice and made way too many unecessary calls and trips before I finally decided to simply hire someone to process the paperwork for me (it's legal, but it cost app. $1200.00 above and beyond the nominal costs).

Do as much homework as you posiibly can on what it involves... remember, you're dealing with two different governments with widely varying rules and regulations re: immigration.

I don't even pretend to understand the technicalities of my status and simply keep my mose clean and stay out of trouble :)
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Kellanved Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-29-04 09:58 AM
Response to Original message
3. depends
Most countries have treaties to avoid double taxation. I'm not really sure how it works in detail.
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flordehinojos Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-29-04 10:00 AM
Response to Original message
4. I may be wrong and misinformed. I think you do.
And, particularly so if you bring the money back to the U.S.

Also, paying taxes works to your benefit -- as one social security worker told me not long ago... there are people who have made lots of money and were rich in their younger days, who paid attorneys lots of money to find the loopholes that would keep them from paying their social security taxes; people who may have not invested their money wisely, so that when retirement comes and they are expecting a big retirement check, their retirement may be as small as $200 or $300. a month, and they, in the middle of having heart attacks on finding out what their retirement benefit has been reduced to, they ask 'how is this possible if i made so much money?' -- then the social security retirement benefit worker has to tell them ... 'you may have made a lot of money but you only paid a pound's worth of it in to your retirement benefit.' the point is, you get back what you put in. it is best to wise, pay your honest taxes, lots of them so that when you retire you'll have enough to live on.


and, while i am on my high horse, i'll also like to say republicans like to blame all the illegal immigration crowd for the state of our bankrupt social security system. the illegal immigration crowd may bear some responsibility on that ...... but, WHAT ABOUT THE BIG FAT REPUBLICAN LOOPHOLERS WHO PAY NO TAXES, FIND WAYS TO MOVE THEIR COMPANIES OUTSIDE THE U.S. SO NOT ONLY THEY ARE NOT PAYING TAXES, THEY ARE ALSO NOT PAYING WORKERS WHO ALSO PAY NO TAXES .... etc.

I think we have to look at the big picture.

okay. that's it. i'm off my high horse.
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papau Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-29-04 10:19 AM
Response to Reply #4
5. You are correct - the US is one of the few to tax "worldwide" income
of course there are credits for overseas taxes paid, and there is a living overseas first dollar exclusion -

so in general you are better off than you'd be living in the US.

But you do not excape US taxation by living outside the US and/or earning your income outside the US.
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cosmicaug Donating Member (676 posts) Send PM | Profile | Ignore Sun Aug-29-04 10:34 AM
Response to Reply #5
8. Better off?
papau wrote:
so in general you are better off than you'd be living in the US.

How are you better off if you're paying foreing taxes as well?
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northzax Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-29-04 12:08 PM
Response to Reply #8
16. because your foreign taxes are often deductable
and, despite what the Republicans would have you think, the US has the lowest tax burden in the post-industrialized world.
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2Design Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-29-04 11:02 AM
Response to Reply #4
12. the illegal immigrants pay ss but don't get anything in return
many have false ss #s and pay taxes but get nothing in return so I can't understand how rethugs blame them....

the corporations as citizens who rob us is the problem...
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northzax Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-29-04 11:16 AM
Response to Original message
14. basically, yes
as a US citizen, you are liable for income tax worldwide (yes, even in space, astronauts pay taxes to.

there is an 80,000 exemption for anyone who is a bonafide, legal resident of another country, or for someone who has spent the entire (yes, the ENTIRE) year outside the United States, territories or possessions. If you live in Berlin, for instance, and make 50,000, you pay no US taxes (you also gain no SS or medicare credits) whether or not that money comes from US sources. If you make 100,000, you pay taxes on only 20,000. There are other exemptions, if you pay local income tax, you can deduct that from the tax on the 20,000. It is often more beneficial to take the foreign tax CREDIT, where you deduct the foreign taxes from your entire US tax bill. you have to choose. You can deduct housing expenses above 10,800.

get an accountant if you live overseas, the rules change all the freakin time. And yes, you can still vote by absentee ballot.
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