• kungen@feddit.nu
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      17 days ago

      have to pay taxes to the US on my income that I earn while living elsewhere

      You do an FEIE deduction on your 1040. If you’re earning less than $120,000 in a year and live more than 330 days outside of the US during a tax year, you thus don’t need to pay a single dollar to the IRS.

      (I agree it’s messed up that US citizens have to file taxes, but you don’t need to resign your citizenship to avoid paying US taxes - as long as you’re a bona fide resident of a foreign country and earn less than $120k.)

        • kungen@feddit.nu
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          17 days ago

          You’re earning significantly over $120k/year? Then you file a form 1116 to have a credit against foreign-paid taxes. And even then, whatever income was left over after deductions doesn’t put you automatically in the highest tax classes.

          Where are you living where you’re earning so much? I know many US expats, basically no one is earning that much, much less native-born citizens. It’s the US that usually pays much more for engineering, not as much in RoW.

          Is your cost of living so high that you’re unable to save any of your super high income? You don’t necessarily need to “extract wealth from other people”.

          It sucks to need to file taxes to a regime you’re not residing in, but you surely understand the purpose of it? Don’t you think it’s probably a good thing that billionaires can’t just make big profits in the US and pretend they’re living in Malta?

          Sorry, but as someone who has helped several high-earning expats with their US taxes, it really seems like you’re either setting hinders for yourself (intentionality or otherwise), or doing some creative writing.

            • kungen@feddit.nu
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              17 days ago

              Not significantly more.

              Good, and you understand how the level calculations work, right? If you earn $121k, you’re only going to calculate taxes for $1k of income for example.

              It sucks to pay even a cent to the US, but probably still cheaper and less risk compared to giving up citizenship – especially if you have family there that’d you’d like to be able to visit in the future.

              for a consultancy in the US

              That makes it a bit more complicated, but if you’re abroad over 330 days, you’d fill form 673 to prevent withholding for example. Have you not retained an accountant to help guide you through this? Based on the information you’ve shared, it seems like you’re paying a lot more into the system than you need to.