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0 pointsspoonie9y ago0 comments

The US has tax treaties with just about anywhere good want to go, so no double-taxation. (And no, paying income tax in two countries is not double-taxation.)

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3 comments · 1 top-level

mpweiher9y ago· 2 in thread

Unlike just about any other country in the world, the US will tax you even if you don't live or derive your income there.

Furthermore, also unlike every other country in the world, the US will only deduct the paxes you paid in the other country from the taxes it thinks you owe it on income you earn+spend while living abroad. Every other country considers your tax obligations fulfilled.

mattkrause9y ago

However, you can either 1) Exclude the first ~$100k from your US taxes altogether, or 2) Receive a credit for taxes paid to the other jurisdiction.

Most places, particularly those where you'd earn a high salary, have higher tax rates (particularly if taxes cover what would be health insurance in the US), so the credit often completely cancels your US taxes.

In many places with lower taxes, it's fairly difficult to earn $100K to begin with, so you're covered there too.

The two situations which are tricky are 1) Earning a lot in a low-tax location (maybe oil workers?) 2) Having income from a mix of US and non-US sources (renting out your American apartment?) since your US income gets "bumped up" to the tax bracket associated with your worldwide income.

spoonieOP9y ago

Yes. And because of the tax treaty you get a tax credit for the foreign income tax paid, hence it's not double-taxation.

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