After the election, some proclaimed they were going to leave the country. It may be an appealing fantasy, but the reality is not simple, especially when it comes to your finances.
Here’s what you need to know about moving abroad.
Family ties still bind
Uncle Sam is still your uncle. “Just because you don’t reside in the U.S. doesn’t mean you are exempt from filing a tax return. All U.S. citizens, no matter where they live, must file a return. They may not owe any taxes because of the foreign earned income exclusion or foreign tax credits, but filing is still required,” says Joshua Zimmelman, president of Westwood Tax & Consulting in Rockville Centre.
Banks may not welcome you
Due to the disclosure requirements the United States puts on foreign banks, some do not accept new accounts from U.S. citizens. “Or they may require a minimum amount to make it worth their while,” Zimmelman says.
Beware of business hurdles
If you work as an independent contractor or own a business abroad and pay into that country’s social security system, in some cases you no longer have to pay U.S. Social Security and Medicare taxes. However, “many countries don’t have treaties with the U.S. on this issue and contributions must be paid both to the resident country and the U.S. during the tax year,” says Crystal Stranger, author of “The Small Business Tax Guide.”
The bottom line, says Abby Eisenkraft, an enrolled agent with Choice Tax Solutions in Melville: “The U.S. has a long reach — there’s nowhere to hide.”