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Ricedoll's Issues with US Taxation

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Ricedoll's Issues with US Taxation

Postby ricedoll » Thu, 25 Feb 2016 1:15 pm

Strong Eagle, how do you feel about having to file taxes every year and paying additional US taxes (if any) for as long as you are holding your US passport?

Secondly, since I am new to this issue. Does it mean to maintain a valid PR, you need your REP need every 5 years? And to quality for REP renewal, you need to live in Singapore 3/5 years? I read somewhere a while ago, the husband got his PR via his SC wife (they do have a son) and they only use his PR when traveling back to SG for holiday - living overseas now. Only plan to retire in SG in the long future. I didn't question if his PR is still valid now. But in their case, how is his PR still valid? For example in HK, you can get a HKID (PR) after 7 years of living there. Its permanent so you can get your HKID, live in Canada for 30 years, still come back HK with your HKID. In my knowledge, SG PR needs you to be physically in SG right?

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Re: Apply for PR with different passport? (Dual national)

Postby BBCWatcher » Thu, 25 Feb 2016 2:19 pm

ricedoll wrote:Strong Eagle, how do you feel about having to file taxes every year and paying additional US taxes (if any) for as long as you are holding your US passport?

You don't have to go far to answer that question. How do you feel about paying taxes to Singapore as long as you are holding a Singaporean passport (or PR status), with the only exception if you have low income and live in low value housing? Singapore's MediShield Life premiums (taxes) started November 1, 2015.

....And here's the only answer: however you want to feel about the responsibilities and obligations of Singaporean citizenship (or PR status) within your personal circumstances and attitudes. You're entitled to your own feelings, and so is everyone else. I don't presume to judge how somebody else should feel. Including my wife and children.

I recall a friend of mine considering whether to renounce his citizenship. One factor he considered among many is the fact that he had people he cared about -- family members -- living in that country. (Or with the reasonable prospect of living in that country, at least.) He wanted to maintain access to that country in order to visit his loved ones and stay with them as long as he wished. However, that was only a possibility, not a certainty -- a contingent benefit of that citizenship. Fast forward a couple years, and his father was diagnosed with Alzheimer's Disease. His father and mother needed a lot of help, and so he stayed for extended periods with them, as his citizenship allowed. It's hard to put a monetary value on that, but "high value" is fair. He got to spend time with his father while his father still had some cognition, and he's helping his mother cope with what are very difficult circumstances.

Would I presume to judge how others ought to feel about their citizenships and the evolving rights, privileges, obligations, and responsibilities associated with their citizenships? I don't even try.

Here's another example. My wife's citizenship means that, if I were to predecease her (at least too early), she'd pay a hefty inheritance tax even though she's not presently a resident of that country. I wish it were otherwise, but so it is. But her citizenship is hers, part of her personal identity. If she is concerned about inheritance tax, then she gets to consider a change in citizenship status. I would hope she would ask me what I thought about that, but that's optional. I don't get to decide how she should feel, and I won't even try. I married her, including her personal identity.

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Re: Apply for PR with different passport? (Dual national)

Postby Strong Eagle » Thu, 25 Feb 2016 11:10 pm

ricedoll wrote:Strong Eagle, how do you feel about having to file taxes every year and paying additional US taxes (if any) for as long as you are holding your US passport?


There are a lot of ways to answer that question. Unlike a lot of tea party reactionaries, who think government is evil and needs to be choked and strangled to death, and who see paying any taxes as the equivalent of slavery and servitude, I see government as the only peaceful vehicle available to deal with the increasing complex environmental and social issues we all face.

I see the US as necessarily having a leading role in the world for a variety of initiatives that will enable my children and grandchildren to inherit a decent world. And, I rather believe in that old saw, "I willingly pay public school taxes because I don't want to be surrounded by stupid people."

Therefore, while there are programs and policies with which I disagree, and while I recognize there is fraud and waste at some level, I don't have any issue with paying US income taxes so long as I am a citizen and able to benefit from that citizenship. OK... maybe I do object to having to pay for Congress and would actually like to drown them all in the Potomac with burlap sacks and heavy rocks.

You seem focused on one aspect of the US tax code. You have to make quite a lot of money to actually pay US tax, and if you do have to pay US tax you can also tax a foreign tax credit that offsets, dollar for dollar, any foreign income taxes you may have paid. The chief hassle is the level of paperwork that has to be filled out to take advantage of the exclusion. And since I live in a state without a state income tax, I don't know how the exclusion works for state income tax although I understand most state tax codes have provisions to eliminate or reduce taxation at the state level.

Some people say this puts Americans at a competitive disadvantage in the world but I don't see this as being true. First of all you have to make a LOT of money to actually be in a double taxation situation, and secondly, if you're making that much money, pay your FERKING tax!

Next, if you own property in the USA, or have investments in stocks, or other sources of of passive income, you have to file an income tax return anyway, regardless of whether you had foreign sourced income or not. But, it's not just the US that requires this... I'd have to file a French tax return for my Paris condo (I wish!), and I'd have to file a Singapore tax return if I own income producing property, even though I am no longer resident in Singapore. I really don't see that the US is much different in the handling of passive income. You file where you earned it.

Some say, "Yes, but... I have to pay taxes on passive income at the rate as though my excluded earned income was included." And I say, that's the rules. There are lots of things to not like about taxes. Perhaps I'd prefer to see a different set of tax brackets. Perhaps it is not correct to double tax dividends, as done in the US, first at the corporate level, and then at the personal level. Some think that capital gains should be taxed at a lower rate, others think it should be the same as ordinary income.

The bottom line is that, as a US citizen, you continue to receive the benefits of citizenship even when abroad, and especially if you continue to own property in the US (which I recommend, for example, keeping your USA residence and renting it out).

Secondly, since I am new to this issue. Does it mean to maintain a valid PR, you need your REP need every 5 years? And to quality for REP renewal, you need to live in Singapore 3/5 years? I read somewhere a while ago, the husband got his PR via his SC wife (they do have a son) and they only use his PR when traveling back to SG for holiday - living overseas now. Only plan to retire in SG in the long future. I didn't question if his PR is still valid now. But in their case, how is his PR still valid? For example in HK, you can get a HKID (PR) after 7 years of living there. Its permanent so you can get your HKID, live in Canada for 30 years, still come back HK with your HKID. In my knowledge, SG PR needs you to be physically in SG right?


Yes, REP's are limited to a maximum of five years, and sometimes less if the ICA thinks you're a PR abuser. There is not a hard and fast rule of 3 out of 5 years and it's probably a good starting point. Look at it this way. If a person has been out of the country for 4 out of 5 years, but made a lot of money and paid a big chunk of Singapore income taxes, and maintains property in Singapore, she might still get her PR renewed because the ICA sees sufficient ties.

OTOH, if you're from the subcontinent, got your PR, live in a shared HDB flat, earn a minimal salary, then go back to the subcontinent for 3 years to have a baby that the MIL can look after, you probably won't get your PR renewed.

You can also retain PR even if you have been out of the country for extended periods of times if the Singaporean company that employs you has made it a condition of your employment that you be overseas. But, the REP still needs to be renewed and the ICA may ask for additional documentation.

Finally, I believe, but do not know, that the ICA/gahmen in general, has an informal policy with regard to PR for spouses of Singapore citizens. I think the gahmen wants to encourage family units, and to have those family units come back to Singapore and domino a few little ones for future national service. So, overseas REP's get approved to keep a good relationship going with the Singapore citizen.

I close with this. I got my PR in 2007, renewed it in 2012, and it now expires in 2017. I left Singapore at the beginning of 2013 and I am in the process of relinquishing my PR because the exchange rates and new Medishield premiums are not covered by the interest rates paid on CPF. And, I'm pretty sure I won't be back to Singapore to live again... too much has changed. It used to be that Singapore PR had a number of advantages... those are mostly all gone now, and the best thing about it is that you get lose a job and not be tossed out of the country.

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Re: Apply for PR with different passport? (Dual national)

Postby ricedoll » Fri, 26 Feb 2016 12:57 am

Thanks Eagle for your explanation.
You mentioned you have 3 passports - the US, the UK and Canada. By keeping your US passport, do you have any strong desire to live and work in the US in the future? Because I know many Americans are now moving to Canada. And those with US/Canada dual citizenship would now rather renounce their US passport for tax reasons.

Secondly, do you pay any US taxes from overseas? Yes we pay US taxes, but its all my husband's honest and hard-earned money! Just because we earn a lot doesn't justify citizenship based taxation! Its day-like robbery!

Thirdly, you mentioned about benefits of your US citizenship while being overseas. Can you elaborate on this? My husband surely hasn't felt any. If he sells our house where we are living now, the US taxes the profit of this transaction! This is not just filing taxes, but paying taxes on what you make through your own overseas property! Also, like I mentioned in another thread, the company will be paying 80% of our future kid's schooling. Whatever the company subsidised will be taxed too! His retirement fund is also NOT recognised in the US, so it gets cashed out every month and we pay taxes on it too. :(

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Re: Apply for PR with different passport? (Dual national)

Postby earthfriendly » Fri, 26 Feb 2016 10:57 am

How do I feel about paying US tax?

I need the streets and highways to be properly serviced so I can arrive at my workplace safely to make myself some mullah. An expression comes to mind, it takes money to make money. Taxes pay for infrastructure and services like libraries, schools, fire and police departments ..... the list goes on. Since nobody likes to work for free, these needs to get paid for.

Another question that is somewhat related. Why should the US taxpayers pick up the tab for US being the world's policeman?

Not here to debate about the benefits of US military presence around the world since it is a topic unto itself. Do I want to live in a world without policeman? To quote John Reed "In a world with no policeman, these outlaws and belligerents harm innocent people and prosper from doing so thereby encouraging them to expand their bad behavior and encouraging others to imitate them. 70 years ago, the Axis leaders—Adolf Hitler, Benito Mussolini, and the Japanese—decided to take over the world. No policeman stopped them—at first."

So you see, it offers a semblance of peace so I won't easily fall into harm's way. Plus, US corporate empire can only thrive during peaceful time . And that in turn allows people like you and me to benefit from the economic slice :mrgreen: .

More question. Why should USA be subsidizing the world's pharmaceutical need?

Some Singaporeans suffer from sticker shock on this one. Americans will pay many times over for the same drug say, compare to someone in Mexico. It is what the market will bear. Cost of living is different. US is a major hub for R & D and the company needs to recoup these costs. Should I be feeling unfair for bearing the larger financial burden? And then just call it quits. The expression throwing baby out with bathwater comes to mind. US is in a good position, equipped with the resources to do so. So, it is a natural role for them. And I, in turn, get to benefit from having these drugs be made available to me.

I also do not like to part with my hard earn money. But the fact that the money is being put into good use takes away some of the stings. Plus, you know, those people who pay little to no taxes, it just means they are not making a lot of money. And hence not able to enjoy the "good" life. So the fact that you are in a higher tax bracket is in a way, a form of blessing.

Hope this helps to clear out some of the clouds / doubts. Peace!

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Re: Apply for PR with different passport? (Dual national)

Postby ricedoll » Fri, 26 Feb 2016 12:01 pm

Earthfriendly, how much US taxes do you pay per year? my husband has colleagues who pay >$20K USD and how do you feel about that? there are also instances an individual spent more than 2 weeks of preparing, sorting and filing (adding up to $1000 prep fees), only to realize he owe the US $2. There you go! If I am not living in the US, I don't feel obligated and justified to pay taxes. Perhaps you don't pay a lot, and perhaps you have big plans to return to Uncle Sam after your gig in SG. But for us who have no desire in returning nor finding a job there, this is just day-light robbing! If I want to change the world or contribute to a good cause, I could have found my own charity and donate my money. Lastly, a "good" life is dependent on how you see it. We could have had a "BETTER" life if CBT is not in our lives. This is not Robin Hood 2016.

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Re: Apply for PR with different passport? (Dual national)

Postby earthfriendly » Fri, 26 Feb 2016 12:32 pm

US tax code is unnecessarily complicated and a convolution all unto itself. I do not believe there is a living person who has read thru the entire collection of the tax codes. Over 6 billion hours spent on complying with Federal tax code. What a waste of resources. And professional tax preparers make mistakes all the time. And I don't blame them.

I think the other forumers are trying to tell you that you can get exemption of $100k of foreign income? Anyway, I am not familiar with this situation myself. So can't advise further. I think it is a personal choice on where you choose to live and pay your tax. And I don't want to get into that. Not here to tell people how to live. All I was saying, all these stuff are not free and somebody needs to pay for it. And it is done via taxes. And this is not unique to USA. Although picking up the tab for world defence is. And the subsidy of medical drugs. Ouch, now you making me feel the pinch in my pocket.

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Re: Apply for PR with different passport? (Dual national)

Postby earthfriendly » Fri, 26 Feb 2016 12:50 pm

And also if you notice, I put the "good" life in quotation mark. Meaning, it is all relative.

What is CBT?
Last edited by earthfriendly on Fri, 26 Feb 2016 1:08 pm, edited 1 time in total.

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Re: Apply for PR with different passport? (Dual national)

Postby ricedoll » Fri, 26 Feb 2016 12:59 pm

CBT citizenship based taxation. Esp for Americans.
So, Earthfriendly, do you pay US taxes?

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Re: Apply for PR with different passport? (Dual national)

Postby earthfriendly » Fri, 26 Feb 2016 1:09 pm

Me and my family live and work in USA. So, most certainly, this is where we pay our taxes. I am really not sure what you are getting at ? And we do not have the CBT issue that affects Americans living overseas. If that is what you are asking.

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Re: Apply for PR with different passport? (Dual national)

Postby ricedoll » Fri, 26 Feb 2016 1:35 pm

Oh yes the US does!
http://www.forbes.com/sites/robertwood/ ... ac07f2a6e6

The one and only country in the world, along with another African country that has CBT.
My husband works outside of the US, and we pay lots of taxes back to the US every year! You pay to the country you work in + back to the US! Its like double taxation!

I suggest you google "FATCA" and "CBT Americans" to learn about the issue. Many Americans in America have never even heard about it, but it is affecting more than 8 million Overseas Americans. Any American working in any part of the world, you HAVE TO file taxes back to IRS every year for the rest of your lives! And if you earn more than something like 90KUSD, you pay additional taxes to the US. Like I mentioned in another thread, we have a friend who is an airline Captain. In addition to the 20% he pays to the country he works in, he pays additional >USD$20K each year back to the US!!! While not enjoying any US benefits, he has to pay because he earns too much.

We would have no problem paying taxes to the US if we live in the US, but we don't!
If you have plans to work overseas in the future, please see this group:

https://www.facebook.com/groups/AARO.Open.Forum/

sorry belladonna for hijacking this post... somehow discussions always lead to US citizenship :)

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Re: Apply for PR with different passport? (Dual national)

Postby ricedoll » Fri, 26 Feb 2016 2:44 pm

Of course I am in no means trying to say which citizenship is better than another. I am simply using myself and my husband as a case in point to elaborate the problems we face.

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Re: Apply for PR with different passport? (Dual national)

Postby sundaymorningstaple » Fri, 26 Feb 2016 4:31 pm

If you are earning less than the 100K+ that is the current Income Earned Abroad Exclusion, you pay zero income taxes if you have no other income. Neither will you pay Social Security taxes or any other taxes. FATCA and Fbar have no tax liabilities either as long as they are timely & correctly filed. They are information returns. Might be a good idea to see a tax man and have them explain it to the two of you in layman's terms as you seem to think the FATCA & Fubar are costing you money (aside from the costs of the tax accountant to file it out - if you need that kind of assistance). They are not, but I grant you they are a pain in the arse. In that we can agree. Oh, and I don't agree with BBCWatcher 100% either, but what you are saying doesn't hold water at all.

Additionally, I am a Yank as well and I'm also, like BBC married to an Asian woman (for 33 years) and have been in Singapore for 34 years. Will I retire here? I hope not. But even at 68 I'm still flexible as I'm still working full time and haven't retired just quite yet. And when China start serious flexing it's newly found muscles in the South China Sea, I might make my move back to the US sooner than expected. You might want to think about that aspect as well and not just from a tax viewpoint.

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Re: Apply for PR with different passport? (Dual national)

Postby BBCWatcher » Fri, 26 Feb 2016 4:49 pm

ricedoll wrote:The one and only country in the world, along with another African country that has CBT.

That is factually incorrect, and you've been called on it already.

Hungary, Eritrea, the United States, and Singapore (from November 1, 2015) all have citizenship-based taxation (CBT). Other countries, such as Japan, have aspects of their tax codes that are CBT in nature (Japanese inheritance and gift taxes).

The United States has a Foreign Tax Credit, and it's really quite generous because the FTC even allows you to accumulate excess foreign tax credits. You're just simply wrong about that basic fact, too.

Any American working in any part of the world, you HAVE TO file taxes back to IRS every year for the rest of your lives!

Wrong. You are obliged to file only if you meet the income filing threshold. However, for the ~94% of Americans living overseas who genuinely owe zero U.S. tax, the penalty for failure to file a U.S. tax return is ZERO. (As a separate matter, they must file a financial account disclosure form if they meet that threshold, and there is a published failure to file penalty, but no tax is ever owed with that form.)

And if you earn more than something like 90KUSD, you pay additional taxes to the US.

Wrong. It has to be north of about $110,000, all or substantially all foreign, and only if your foreign tax rate is lower than your hypothetical U.S. tax rate. About 6% of U.S. citizens and U.S. permanent residents living overseas fit into this category, including apparently your husband and definitely me.

While not enjoying any US benefits, he has to pay because he earns too much.

Wrong. He's holding a U.S. passport, and that is a package of benefits, current and future, actual and contingent. He is perfectly welcome to terminate his U.S. citizenship if he chooses. (Why hasn't he if he is "not enjoying any US benefits"?)

Many, many, many people complain about taxes -- taxes certainly seem quite important to you -- but OK, no problem: simply give up the rights and privileges associated with your citizenship if you don't like its obligations and responsibilities. There is a solution.

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Re: Apply for PR with different passport? (Dual national)

Postby BBCWatcher » Fri, 26 Feb 2016 4:55 pm

sundaymorningstaple wrote:And when China start serious flexing it's newly found muscles in the South China Sea, I might make my move back to the US sooner than expected. You might want to think about that aspect as well and not just from a tax viewpoint.

I'm not predicting that, but I will say that there is some "insurance" value in a diversity of valuable citizenships within a household. I would also point out that Singapore is a very small place (in case anybody hasn't noticed).


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