Moving Overseas? Don't Forget About the IRS

Thinking about living, working, or retiring overseas? Moving abroad may change your lifestyle dramatically, but it doesn't mean leaving the IRS behind.

In Episode 33 of the Divorce the IRS Podcast, we explore some of the most important financial and tax-planning considerations for Americans living abroad, as well as those considering making the move.

Whether you're retiring overseas, working remotely from another country, or embracing the digital nomad lifestyle, your finances can become significantly more complicated once you cross U.S. borders. The good news is that proper planning can also create valuable tax opportunities.

In this episode, you'll learn:

• Why Americans living abroad generally still have U.S. tax obligations
• How the Foreign Earned Income Exclusion (FEIE) works
• What types of income do and don't qualify for the FEIE
• The physical presence and bona fide residence tests
• How the Foreign Tax Credit (FTC) can help reduce double taxation
• Why the FTC may sometimes be more valuable than the FEIE
• How living abroad can affect your ability to contribute to retirement accounts
• Why your former state of residence can still matter after moving overseas
• How establishing domicile in a no-income-tax state may help before leaving the U.S.
• How Social Security and Medicare taxes work for Americans abroad
• What totalization agreements are and why they matter
• How working overseas could affect your eligibility for Social Security benefits

One of the biggest misconceptions about becoming an expat is that leaving the United States means leaving the U.S. tax system. The United States generally taxes its citizens and green card holders on worldwide income regardless of where they live.

But that doesn't mean expats are without options.

Strategies such as the Foreign Earned Income Exclusion and Foreign Tax Credit can provide significant tax relief when they're used appropriately. Your state residency, retirement accounts, Social Security benefits, and the country you choose to call home can also play an important role in your overall financial plan.

If you're considering moving abroad, planning before you leave the United States can make a major difference.

FREE EXPAT GUIDE

Thinking about living, working, or retiring overseas? Download the free U.S. Expat Guide for a deeper look at the tax and financial planning considerations Americans should understand before and after moving abroad.

Download the Expat Guide:
https://baobabwealth.com/financial-planning-for-americans-overseas/?guide=expat-guide-download

And stay tuned for the next episode, where we'll continue the conversation with even more tax strategies Americans abroad can use to potentially reduce their tax burden and work toward divorcing the IRS, even from overseas.

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