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Comment by CamTin | Hacker News Reader

There are actually things like the expatriation tax and "name and shame" provisions which discourage people from renouncing for tax purposes.

Also (note that I am not an accountant or lawyer and this is not advice), most ordinary people won't see any problem with taxation while abroad beyond the actual inconvenience of filing a 1040 because the foreign earned income exclusion (https://www.irs.gov/individuals/international-taxpayers/fore...) allows you to exclude foreign earned income up to $100,000 from US taxation. Since ordinary people pretty much all earn less than this, they only have to pay taxes to whatever country they are actually in. Only people who are rich enough to hire accountants have to worry about double taxation, and they can probably avoid it by other means that are well-studied among rich peoples' accountants.

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I guess it depends on your definition of "ordinary people", but if you're going abroad for long-term work in any "middle class" industry, you're eventually going to have extremely complicated taxes.

Retirement savings, stock options, real estate, and any sort of investment account makes your U.S. tax return go from "a 1040" to a towering mountain of special forms. A lot of them also lose you the right to e-file, for some reason. And many aren't supported by tax software, or are handled incorrectly.

A lot of "foreign" banks – i.e. your _local_ banks – won't even talk to you. They tell you to make your investments in the U.S. instead, so you get to pay international wire transfer fees and foreign currency exchange fees on every investment. And if you want to move it back, you get to pay them again.

You won't necessarily owe any tax in the U.S., but you sure pay for it in either filing time (10s to 100s of hours) or expat tax accountant fees.

> They tell you to make your investments in the U.S.

And, extra maddeningly, a number of American institutions won't even talk to you, either.

Try calling up Vanguard or Charles Schwab if you're just a normal person who lives abroad and see how quickly they'll tell you "sorry! we don't want your business"

Even if you still have a permanent US address (i.e., not just some post box).

WBK (https://www.bzwbk.pl/) seemed more than willing to open me a bank account quite recently. There were a few more forms due to my being a US citizen, but it seemed like actually fewer than my wife (a Polish citizen with a US Green Card) needed to do the same thing. Maybe things are stricter in the West than in Poland?

It depends on the bank. Essentially it boils down to whether the "foreign" bank is willing to go through the compliance and data-sharing that is impressed upon them by working with Americans. Some do, many understandably can't be bothered.

Right, so why all the fuss over whether some of them don't bother? How many banks do you need? As long as there's one that will take your business, why should you care that the one down the block won't? I guess it could be an issue if you're in a rural area with limited banking competition? Even then, most banking is done online now and a couple of trips a year to the "big city" to get some business taken care of (see the consulate, visit a specialist doctor, sign for a loan, whatever) is just part of life if you're in a smaller town, no matter where in the world that is.

"All of the fuss" is not so much that the choices of banking available to an American abroad are reduced (though they are, and not necessarily due to the laws and regulations of the host country; and of course it depends how difficult it is based on the country) but that FINCEN/FBAR compliance which is in principle aimed at those evading taxes actually results in real pain for typical Americans who are living and working abroad, who only want to do right tax-wise.

> most ordinary people won't see any problem with taxation while abroad beyond the actual inconvenience of filing a 1040 because the foreign earned income exclusion

Well that and most banks refusing American customers because they don't want to deal with FBAR/FINCEN reporting.

My American friends here in Europe have a really difficult time opening a bank account due to this rule.

It's not only foreign banks refusing American customers. American companies such as Fidelity, Vanguard, Charles Schwab and so on won't open investment accounts for Americans abroad and will freeze accounts if they discover you are abroad.

You don't know what you're talking about. Social Security isn't earned income for example, so expat retirees get to pay taxes on that in the US AND their country of residence. You also don't seem to understand how FATCA works and taxation from stuff such as rental properties or retirement account income or even ordinary capital gains such as selling a house.

> Since ordinary people pretty much all earn less than this..

Ever lived in Switzerland? Or London?

> I am not an accountant or lawyer and this is not advice..

It's worse than that, it's just ignorant of the tax and financial reality of being an overseas American.

Sorry, I'm not ignorant of that stuff, it just doesn't apply to me in any meaningful degree. I'm not retired, or close to it, and I don't have any investment income, and I've never owned a home. I just work for a living. Perhaps I oversimplified when I said "ordinary people," but I meant regular working stiffs. I guess I should have remembered the audience on this site is mainly not in that category.

There are lots of complicated interactions with things like pension funds and mortgages that can easily push your "income" over $100k/yr even if your salary is nowhere near that level, which is at any rate, not all that much these days especially for people in the Hacker News industries.

It's a pretty terrible systems.

So making $110k now makes me a rich person with an army of accountants. Got it. Thanks.

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