why: so the government won’t be able to use your money for whatever the fuck they’re planning for the next 4 years.
as a traveler, none of my money has been funding Israel, for example.
one-step method: you basically fill out one extra tax form called FEIE while you’re doing your taxes, write down the dates you were outside of the country, and then since you aren’t in the country and are not receiving any services from the US, you don’t have to pay income tax up to a certain amount (it’s a little over 125k this year).
However, since you don’t pay taxes on that money, it can impact which kinds of retirement accounts you can use based in the US, if any. Also, trying to invest as a US citizen outside the US can suck because of all the agreements with US banks. Many Japanese platforms, for instance, won’t touch me because of US reporting requirements. I also can’t functionally use the tax-advantaged retirement accounts here because many amount to what are called PFICs by the IRS which requires paperwork and are taxed punitively more than wiping out any advantage the retirement accounts would have.
You’re also going to have a rough time getting a US investment account if you don’t have one already. Then you have to figure out how to have a US phone number because two-factor auth basically requires it for any bank or anything that will touch you.
There are other “fun” things about being a US citizen living abroad.
Do you live abroad? I’m expatting in a few weeks (long planned, not in a pure panic due to Trump) and would love ask a few questions if so!
I can try to answer. I’ve lived in Japan for almost a decade (this is my 10th year).
That’s so cool!
How old (ish) were you when you moved?
Did you speak any Japanese before?
Any consideration towards relocating again?
Any other stories you want to share?
ありがとうございます、友達
- moved in my early 30s
- had studied Japanese in a couple of classes and then mostly on my own, but I could navigate and order food. My reading was (and still is) fairly bad
- not really. Partly due to age, but I do quite like it here. It would take something huge to make me move again
- no real stories that I can think of. Expect communication issues and accidental hurt feelings due to language/culture issues at first as it’s pretty unavoidable whilst learning.