# You want to live in the USA? Be Careful!



## Guest (Oct 31, 2011)

Hi all,

I normally post on the Canada page of this website and just wandered over here out of interest. I thought I would share some information with all potential and current residents in the USA. I admire the determination and drive that I see on this board to make the move, but I have seen no mention of the tax implications for doing so. Please consider the following carefully, since I doubt that any of this is reported in great detail in the US media.

1) Are you aware that the US taxes on all worldwide income? That means if you sell your old family home in, say, Belgium, where there are no capital gains taxes, that you have to pay tax on that to the US (A tax that does not exist where the sale took place!). Any foreign income that is earned abroad is also subject to tax. There is no equivalent in the US, as far as I know, to declaring non-dom status like you can in the UK.

If you become a US citizen and later move abroad or back to your home country this works in the reverse - Your worldwide income is taxable in the US even if you don't make a penny there or have any property. This means that selling that same house in Belgium, even if resident in Belgium, will still be subject to US tax. Your income and estate would also subject to US tax even if no longer resident there. This citizenship based taxation extends to holders of green cards or permanent residency status as well. 

2) Do you hold any foreign bank accounts in your home country or in a country outside of the US? Do the aggregate amounts of these accounts equal more than 10,000 dollars? Have you ever heard of FBAR and FATCA? 

If not, you need to get up to speed right away. The US requires all US citizens and residents to declare all foreign bank accounts over the value of 10,000 dollars or face a huge penalty per year for not doing so. This applies also if you are a US citizen living in another country as this is still considered an offshore account. This is the "Foreign Bank Account Report" form that you have to file. 

The penalty is not a joke - Search for FBAR on any search engine and you will encounter many stories of people losing their lifesavings due to the penalties of not reporting these accounts (we're talking potentially hundreds of thousands of dollars). Note that this is merely a penalty for not reporting your account - It is no way tied to a tax obligation not being fulfilled. For example, you could potentially be a US citizen studying abroad with no income but you have a bank account with more than 10,000 dollars in it. If you didn't report this, it is subject to penalties. You have probably heard in the news about UBS and other Swiss banks releasing the names of US clients: They are not only going after tax evaders - Everyday people are being caught up in this as well.

FATCA, on the otherhand, is a piece of US legislation that will require all foreign banks to report US citizen clients to the IRS from 2014 onwards. This means that you are in for serious trouble if you have not reported your foreign accounts previously. Many banks have actually begun to reject US citizen clients due to these restrictions.

This probably sounds insane (I know it did the first time that I heard about it), but if you intend to reside in the USA be sure to report all of your foreign accounts. If you're thinking about permanent residency or taking US citizenship you need to consider the consequences if you ever want to move abroad again - There are now yearlong waits at some US embassies to renounce US citizenship for the reasons mentioned above.

If you don't believe me, head over to the Canada forum. There is a thread about renouncing US citizenship that is 299 posts long and another about the tax consequences for US dual citizens abroad that is currently at _961_ posts and counting. Those together would seem to equal almost all of the posts in this entire forum...


You have been warned!


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## Cafreeb12 (Oct 12, 2011)

DonPomodoro said:


> Hi all,
> 
> I normally post on the Canada page of this website and just wandered over here out of interest. I thought I would share some information with all potential and current residents in the USA. I admire the determination and drive that I see on this board to make the move, but I have seen no mention of the tax implications for doing so. Please consider the following carefully, since I doubt that any of this is reported in great detail in the US media.
> 
> ...


Yes, this is a valid warning. You could end up having to choose between your foreign family and keeping your U.S. citizenship someday like many of us have.


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## Guest (Nov 1, 2011)

Cafreeb12 said:


> Yes, this is a valid warning. You could end up having to choose between your foreign family and keeping your U.S. citizenship someday like many of us have.


I am among those who would whole-heartedly adivse you to dig and do complete research on all aspects, especially your tax responsibilities, before making such an important life-altering decision. All you're hoping for may come with unintended consequences. An uninformed decision on U.S. residence or citizenship could adversely complicate your and your family's life going forward.


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## baldilocks (Mar 7, 2010)

Calgary411 said:


> I am among those who would whole-heartedly adivse you to dig and do complete research on all aspects, especially your tax responsibilities, before making such an important life-altering decision. All you're hoping for may come with unintended consequences. An uninformed decision on U.S. residence or citizenship could adversely complicate your and your family's life going forward.


I would echo that whole-heartedly. I am always urging people who are thinking of moving elsewhere to research thoroughly everything that might affect their new lives and I mean *everything*. For example I have just answered someone who is moving from the USA to UK and wanted to know whether he should bring his spare lightbulbs. The dork didn't even know that the voltages outside the Americas are different!


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## twostep (Apr 3, 2008)

baldilocks said:


> I would echo that whole-heartedly. I am always urging people who are thinking of moving elsewhere to research thoroughly everything that might affect their new lives and I mean *everything*. For example I have just answered someone who is moving from the USA to UK and wanted to know whether he should bring his spare lightbulbs. The dork didn't even know that the voltages outside the Americas are different!


What makes someone who does not know about voltage differences a dork?


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## Bevdeforges (Nov 16, 2007)

Even with extensive research done up front, it is possible to find yourself in a completely unanticipated situation (such as the actual topic of this thread - the tax liability incurred when moving to the US and/or taking US citizenship).

I can also say that the situation changes over time, and advice that may have been valid 10 or 15 years ago is no longer correct. There is a rule on this forum against personal insults - and calling someone a "dork" because they asked a question you find naive definitely fits the definition of a personal insult.

Let's get back on topic, please.
Cheers,
Bev


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## Cafreeb12 (Oct 12, 2011)

Thanks Bev. 

As for doing your research, the IRS changes laws all the time and most recently are called upon to uphold some new legislation specific to "Hire" Frankly, given these new measures and the fact that we have no reason to believe even further draconian measures will not be taken, there is good reason for us to warn about this. There's no way on earth I or others like me can keep our U.S. citizenship going forward. 

If someone needs to know the consequences of this over reaching legislation, then yes do your homework before applying for that U.S. citizenship. It could turn out to be a burden you can't afford whether or not you'd like to.


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## twostep (Apr 3, 2008)

baldilocks said:


> Failure to do even the most basic level of research into the place you are about to move to means that this person is far from the brightest light bulb in the store. It is akin to moving to another country and assuming that they will speak your language when you can't be bothered to learn theirs or, worse, that everything will be the same as "back home" without finding out first. It suggests that the OP on that thread hadn't even been outside the USA, let alone visit the UK before deciding to move there. Isn't that being a dork?
> 
> OK I know we go on holidays to other countries without a previous visit but we (at least most of us), as a minimum do some research - will it be (or is likely to be) hot/cold/sunny/wet/snowy/icy etc. so that we know what clothes to take and most of us know that there will be lots of "foreign" people and also that the currency will be different although to read some "holiday complaints" I sometimes wonder.


What is our focus here? Judge and jury? There has been a lot of sharing of useful information, personal experiences, insight into local peculiarities, pointers and official links for research. Sometimes not what posters wanted to hear. Sometimes the resident trolls rear their heads. A lot of work has been done behind the scenes from resume writing/re-writing to networking for jobs with potential visa sponsor ship or questions too personal to let the trolls have at it.
Speaking of clothes - did you know DFW sports sub-zero temperatures and knee deep snow?
Is there a need to "be outside the US"? I moved to the US with a purse and on-board bag. Had never been there before. Knew nothing about it. Learned that it has pros and cons and that for me the pros outweigh the cons.


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## fnogard (Jul 30, 2011)

*Living in the US with a bank account in France*

Be aware that dealing with a French bank from the US can be a nightmare. My account was with the Credit Lyonnais and I DO NOT recommend them. French bank employees are not trained to deal with transactions to the US. I am on PST so I had to call them at 6AM when there was problems. Most often could not get anybody on the phone for days, even after leaving messages. Because French banks rotate their employees every 6 months for security reasons, as soon as an employee started to be familiar with my account and me living in the States, he or she was moved to another branch or town and I had to deal with someone not having a clue. 

I am a French citizen living in the US since 20 years. I finally closed my bank account in France to avoid all the hassle. 

I had kept a checking account in France because it was convenient since I went back over there each year. No currency exchange and no foreign transaction fees. And because of some transactions in France, it was easy to tell French people to put the money directly in my account instead of sending it to the States.

For all the years I kept this account, my accountant warned me that we should declare everything on this French account, checking and savings, and that I should be careful about not exceeding $10,000 on it. So each year I sent a copy of my statements to my accountant who added to the list of declared things.

But considering the difficulty to manage a French bank account from here, I just closed it. Anybody wanting a bank account in France might want to try BNP, Bank Nationale Populaire, because they own Bank of the West. So if you are with Bank of the West in the US, it might be easier to deal with BNP.

Hope this info can be useful for some.


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## hnyoussef (Nov 4, 2011)

Have you ever tried HSBC? The only problem is the limited branches at USA but you can always do everything in the Internet. Also you can transfer your money easily back home if you have HSBC account at home using Internet. It is so simple and easy.

Sent from my iPhone using ExpatForum


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## stormgal (Sep 30, 2009)

Is it possible *not* to have a bank account? Honestly, they frighten me. I had several subprime credit cards and these people were so evil that when I told them I couldn't pay their ridiculous interest rates, they threatened to take the money straight out of my bank account and have my wages frozen. While that was happening, I was audited on a college tax refund that I had many years ago, and had to pay taxes on it. It was the perfect financial storm for me. So my question is, can you either convert your money into precious metals or keep a stash in your back yard protected by a feral dog? Seriously, every time I think about banks and governments I get sick to my stomach.


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