# I'm so lost : (



## ryder950 (Jan 22, 2015)

Hello All-

I'm an American (USA) from Florida. I married a girl from Italy and she now has dual citizenship for the past 5 years. We have been married for 10 years and we have an 8 year old boy. I work 100% remote for my job. I can do my job anywhere there is an internet connection. 

Here is the problem. We currently live in Florida and I'm working for an American company from my house. The company does not care where I live. It could be on the moon for all they care. I do a good job and they love me for it. 

We want to live in Italy. Since all my work is in cyber space do I still have to pay Italian and American taxes? What kinda of VISA do I need to move with my wife and son? They are both dual citizens with 2 passports. 

We really want to be in Italy... It all seems so complicated... I'm going crazy...
If Italy taxes me isn't it like 50 % I make good money but there would be nothing left......

Any help would be great. 

Thanks
Ryder950


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## _shel (Mar 2, 2014)

You will file USA taxes regardless of where you live, the benefit of being an American citizen. 

You also pay tax in whatever country you are resident in. You generally wont pay the same tax twice due to tax treaties which allow you to offset what you have paid to the country you are resident in. Though you still may end up having to pay taxes to America too.


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## accbgb (Sep 23, 2009)

You need a family reasons visa (see Ministero degli Affari Esteri - Visti ). A relatively simple thing to obtain so long as you don't have a criminal record. Once you arrive in Italy you will need to apply for a Permesso di Soggiorno (PdiS - think of it as a US "Green Card"). The visa allows you enter the country; the PdiS allows you to stay and, in this case, work.

Generally speaking, Italian taxes on your income will exceed any that you might have paid in the US. In the unlikely event that the Italian taxes are lower, you will end up paying the differential to the US. You will not come out ahead and you could very well come up short.

Now, you *could* hide your US income from the Italian tax authorities but that is a risky thing to do and it gets less and less easy to do so due to more data sharing between the two countries.

One thing to keep in mind: if your remote work requires consistent and reliable internet access or involves transferring very large files (such as video edits), then you will want to choose your location in Italy very carefully. In most areas DSL speeds are about the best you can hope for.


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## Bevdeforges (Nov 16, 2007)

As has already been said, you generally owe your taxes (and social insurances) to the country where you are physically located while doing the work - even when working over the Internet and without regard to where your customers or "employer" is located.

And, as a US citizen you and your wife will need to continue to file US returns from wherever you live in the world. However, for "earned income" there is the FEIE (Foreign Earned Income Exclusion) and/or the Foreign Tax Credit that should keep you from having to pay double taxes on your income. Take a look at IRS Publication 54 for an good overview of how the filing-from-overseas thing works.
Cheers,
Bev


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## yosheryosh (Mar 4, 2013)

Florida? Oh I'm so, so sorry. Get your ass to Europe lol.

(I grew up in florida  )


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## BBCWatcher (Dec 28, 2012)

accbgb said:


> You need a family reasons visa (see Ministero degli Affari Esteri - Visti ).


U.S. citizens don't for these purposes. They enjoy Schengen visa waiver privileges.



> Once you arrive in Italy you will need to apply for a Permesso di Soggiorno (PdiS - think of it as a US "Green Card"). The visa allows you enter the country; the PdiS allows you to stay and, in this case, work.


Agreed, and you've described it well. Since Ryder950 is a U.S. citizen that already enjoys visa waiver privileges, he can skip the visa step and accompany his Italian citizen-wife to co-reside in Italy, on the next plane if they wish. Foreign spouses without visa waiver privileges -- a Ugandan citizen-spouse, to pick a random example -- would need a visa.



> Generally speaking, Italian taxes on your income will exceed any that you might have paid in the US. In the unlikely event that the Italian taxes are lower, you will end up paying the differential to the US. You will not come out ahead and you could very well come up short.


That's not quite how I'd put it. The absolute worst case is that, for each dollar/euro of income, he'd either pay the Italian rate or the U.S. rate of tax on that income, whichever is higher. Both countries have foreign tax credits, and they even have a tax treaty, so it cannot be any worse than that and is usually better. Moreover, Ryder950 likely ought to be skipping the Foreign Earned Income Exclusion/Foreign Housing Exclusion and simply using the Foreign Tax Credit on the U.S. side. If he does that then income tax he pays to Italy above what would be his U.S. rate on that income is "bankable" and can, in some cases, be used to offset future U.S. income taxes. For example, if he works 5 years in Italy and his Italian income tax rate is 30% on that income while his hypothetical U.S. rate is 25%, that 5% of extra income tax can accumulate as a Foreign Tax Credit on the U.S. side. Then, if he goes back to the U.S. and works, he can "spend down" that extra foreign tax as a discount on his future U.S. income tax. There are some rules and restrictions -- aren't there always -- but suffice it to say the worst case isn't bad and it often doesn't apply anyway.

Now, if you mean that Ryder950 will "come up short" and pay a generally higher rate of tax when living in Italy versus living in Florida, yes, that's true. He'll also get free enrollment in the very low cost Italian public medical system, tastier pasta, and better rail service. 



> Now, you *could* hide your US income from the Italian tax authorities but that is a risky thing to do and it gets less and less easy to do so due to more data sharing between the two countries.


Italy's tax authorities are rather good at what they do, and they wouldn't really even need data from the U.S. to detect that hypothetical scam. Not recommended. (Hint: How did that household afford _that_ car -- or _any_ car?)


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## accbgb (Sep 23, 2009)

BBCWatcher said:


> U.S. citizens don't for these purposes. They enjoy Schengen visa waiver privileges.
> 
> 
> Agreed, and you've described it well. Since Ryder950 is a U.S. citizen that already enjoys visa waiver privileges, he can skip the visa step and accompany his Italian citizen-wife to co-reside in Italy, on the next plane if they wish. Foreign spouses without visa waiver privileges -- a Ugandan citizen-spouse, to pick a random example -- would need a visa.


Yes, of course. Ryder950 will need to be certain to apply for his PdiS prior to the expiration of his 90 day visa waiver or things could get a bit sticky.





BBCWatcher said:


> Now, if you mean that Ryder950 will "come up short" and pay a generally higher rate of tax when living in Italy versus living in Florida, yes, that's true. He'll also get free enrollment in the very low cost Italian public medical system, tastier pasta, and better rail service.


Yes, that is exactly what I meant.




BBCWatcher said:


> Italy's tax authorities are rather good at what they do, and they wouldn't really even need data from the U.S. to detect that hypothetical scam. Not recommended. (Hint: How did that household afford _that_ car -- or _any_ car?)


There was a time when this wasn't too difficult, especially if one spouse earns a fairly good "legal" income while the other works in nero. But I agree, those days are mostly gone.


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## ryder950 (Jan 22, 2015)

Thank you all for the advice!!!!!

We have a lot to think about !!


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## BBCWatcher (Dec 28, 2012)

It occurs to me we didn't mention social insurance taxes. If you're self-employed then presumably today you pay the U.S. Self-Employment Tax. That's 15.3% on your first $117,000 (tax year 2014) of earned income and 2.9% above that amount. Those contributions provide social insurance today (e.g. disability insurance) and retirement benefits for you and your spouse in the future (starting from age 62 to age 70, with higher monthly benefits the longer you wait to start collecting).

Italy and the U.S. have a social security treaty, so you won't need to contribute to both systems if/when you move to Italy. If you're self-employed you presumably would be required to switch over to the Italian system, called INPS. I think you'd be classified under the _Gestione Separata INPS_, and if so your rate would appear to be 28.72% on your first 100,123 euro (tax year 2014) and zero thereafter. That's also applied on your gross income, like income tax. In exchange for those contributions you'd receive INPS coverages, including future retirement benefits if you have enough contributions. INPS can count your U.S. contributions in order to qualify you for Italian retirement benefits, if necessary. Yes, you could receive a U.S. dollar retirement benefit from U.S. Social Security and a euro retirement benefit from INPS.

If the treaty allows you to have a choice of systems then the U.S. system is probably preferred. The contribution rate is lower (unless you are earning quite a large amount of income), and it's a reasonable expectation that the U.S. benefits will be higher. But I don't think the treaty will allow you to have a choice if you move to Italy. Check the treaty, though -- the U.S. Social Security Administration has a good summary on their Web site.


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## accbgb (Sep 23, 2009)

BBCWatcher said:


> It occurs to me we didn't mention social insurance taxes. If you're self-employed then presumably today you pay the U.S. Self-Employment Tax. That's 15.3% on your first $117,000 (tax year 2014) of earned income and 2.9% above that amount. Those contributions provide social insurance today (e.g. disability insurance) and retirement benefits for you and your spouse in the future (starting from age 62 to age 70, with higher monthly benefits the longer you wait to start collecting).
> 
> Italy and the U.S. have a social security treaty, so you won't need to contribute to both systems if/when you move to Italy. If you're self-employed you presumably would be required to switch over to the Italian system, called INPS. I think you'd be classified under the _Gestione Separata INPS_, and if so your rate would appear to be 28.72% on your first 100,123 euro (tax year 2014) and zero thereafter. That's also applied on your gross income, like income tax. In exchange for those contributions you'd receive INPS coverages, including future retirement benefits if you have enough contributions. INPS can count your U.S. contributions in order to qualify you for Italian retirement benefits, if necessary. Yes, you could receive a U.S. dollar retirement benefit from U.S. Social Security and a euro retirement benefit from INPS.
> 
> If the treaty allows you to have a choice of systems then the U.S. system is probably preferred. The contribution rate is lower (unless you are earning quite a large amount of income), and it's a reasonable expectation that the U.S. benefits will be higher. But I don't think the treaty will allow you to have a choice if you move to Italy. Check the treaty, though -- the U.S. Social Security Administration has a good summary on their Web site.



There is a very helpful table of possible scenarios at International Programs - Totalization Agreement with Italy


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