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Comment by STRML | Hacker News Reader

It's something I've considered. As a now resident of Hong Kong, I was surprised - and delighted - with how incredibly easy it was to handle my taxes. Front-to-back, I could do the whole thing, including payment, in less than an hour and understand the whole system.

Unfortunately, it is nowhere near so simple in the US, and they have no regard for expats. The US treats its expats worse than any other country in the world. The forms are atrocious. And I could go on about being taxed heavily for services I don't use.

Unfortunately, relinquishing citizenship is just not possible for most, including me. With family and obligations, it's just not realistic. But it is appealing.

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By the way, if you hate the US's horrible tax forms, you should boycott the company Intuit (makers of Mint.com, QuickBooks, TurboTax, and more).

Intuit spends a huge amount of money every year lobbying to make sure that tax forms are as complicated as possible: http://techcrunch.com/2013/03/27/turbotax-maker-funnels-mill...

So evil!!!

I would point out that Mint.com was a startup at first, and I can't see how it or Intuit can prevent further competitors, e.g. personal capital. So... While I do prefer free tax filing tools over QuickTax, I'm not sure Mint is to blame. If anything, by using a free service, aren't you costing them money?

Edit: I might be mistaken as in Canada (where I am) it's not as easy as pay what the Government says you owe, but in turn the system does let you login to view your (bigger company) tax forms, your last return results; other relevant forms haven't been too hard for me to get ahold of digitally. Digital deposits are quick and there's multiple competing Windows and web-based clients that are both free (not just for low incomes) and certified as compatible by the CRA for each year's tax season. This has pushed more than one company to offer their products free or at a discount, but I actually really like one of the Windows clients so I'll use it next time.

...that's like saying that by using Facebook and Twitter, you're costing them money. They'll figure out another way to make money, you're just not the customer.

That's why I don't use Mint.

You are so right, they should be undercutting the bidders for building it for the government and really becoming the primary developers. Why can't I deal with Intuit every day?

Intuit strives to keep tax forms unintuitive. Well if that isn't Orwellian then I don't know what is.

I think it is Clay Shirky who said something to the effect that bureaucracies have every incentive to not solve problems. Otherwise the reason for the bureaucrats' existence would cease. We won't see solutions from the US government. Ever.

Yes the tax stuff is painful but as in your case there are reasons to keep the citizenship.

The bureaucracy expands to meet the expanding needs of the bureaucracy.

Actually bureaucracy was invented to battle corruption. But back then you really couldn't call it corruption, because without bureaucracy there were no rules or laws that could be faithfully executed or their faithful execution monitored. Kleptocracy and outright feudalism was the norm.

So in essence, without bureaucracy there is no corruption just as there is no shadow without the light.

Whenever bureaucracy has to be simplified, keep in mind that the potential for abuse usually increases unless the legislators take very much care.

Tried to find this quote but failed. Any chance you could dig it up? I love it :)

I think blaming bureaucracy in general is giving a free pass to Congress.

A lot of the federal government is fully aware of their problems, and knows solutions, but they are not authorized dictate policy (except in small, limited ways) or otherwise enact solutions ... they are following their mandate set up by Congress. Congress sets up the bureaucracy to fail, and then blames it for failing. The classic example is the USPS, which is micromanaged by Congress and then berated when the micromanagement produces the expected failure.

So blame Congress.

That's like saying that programmers have no incentive to solve buggy systems, because otherwise their reason to exist would disappear.

Sure, there are probably a nonzero number of folks making their own job-security out there, but in both cases you'll find plenty of people who would be happy to have the system work better and who have some professional pride in it.

As a U.S. expat, I haven't noticed this. The forms aren't as easy as the Danish forms (which are fully automatic and done for you), but not too complex in my situation of just having a regular salaried job. I paid a CPA $200 or something to do it the first time, because I wasn't sure I would do it correctly myself. But the result was pretty readable and basically what I had thought I was supposed to do. Unnecessarily many pages, but simple enough ones.

And due to the foreign-tax credit there's no double taxation. I compute my U.S. tax obligation, subtract Danish taxes paid, and the result is always $0, since U.S. taxes are comparatively low.

You are one of the lucky few. :-)

Be sure not to invest your savings in mutual funds. Form 8621.

Be sure to avoid the local equivalent of an IRA if you want to do retirement savings. The IRS might not think it is a tax-free pension. And they might think that employer contributions are taxable income to you.

Don't own stock in a foreign corporation. Don't become an officer with signature power over the corporation's bank account.

Be sure to report all of your bank accounts and investment accounts on FinCen 114 (the new FBAR). Don't forget Form 8938 as well, if it applies to you.

I'm not saying you can't have a simple tax life as an American abroad. I'm just saying that you have to have a simple life in order to achieve it.

The problem is not with the U.S. tax liability. As you said, the foreign tax credit will take care of that. You won't pay U.S. income tax. The real problem is with the paperwork and the penalties for screwing things up.

Is that what you have to do if you're a citizen? Or does it apply to permanent residents as well?

Yes. Being a "US person" includes citizens and permanent residents. http://www.irs.gov/Individuals/International-Taxpayers/Class...

Wow, it even applies to resident aliens for tax purposes.

>The real problem is with the paperwork and the penalties for screwing things up.

When I lived abroad I just used a competent CPA. I'm not disagreeing with your statement, I'm just pointing out a viable solution.

Ah yeah that's true, I could see it being a bigger issue even as a regular salaried employee if I had really moved a lot of stuff to Denmark. As more of an expat than a committed immigrant, I have all my financial stuff in the U.S. still: I contribute to an American Roth IRA, my mutual funds are American ones held with a U.S. brokerage, etc. So all I really do financially in Denmark is pull a salary.

Come to think of it, violating Danish tax law is probably the biggest likely issue as a result. E.g. income in the Roth IRA doesn't generate 1099s, because it's not a taxable account. But is that taxable income to a Danish resident? Maybe!

>> not too complex in my situation of just having a regular salaried job

They are pretty much a nightmare if you're an entrepreneur and own corporations abroad. Look up Form 5471.

Even for non-entrepreneurs, I would say your experience is way better than most. Most US people overseas who say that taxes aren't a problem for them generally are blissfully unaware of their continuing US tax obligations.

You have to understand, the incentives and concerns of the two places are quite different between the U.S.A. (a place where expats come from), and Hong Kong (a place where expats go to). The U.S. has little incentive to facilitate Americans taking their capital and leaving. Hong Kong has a lot of incentive to facilitate that process.

I heard Germany and Italy had many double taxation issues also, besides Australia, but they have at least treaties to avoid such. They only other state which goes after their people living abroad is Ethiopia, but they have double taxation treaties with at least Israel, Italy and South Africa. So yes, US tax laws are the worst.

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