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I'm going to just whine a bit about being American...
We've just completed our first full tax-year living abroad and I'm having so much envy of my non-American expat friends. The tax rate in Hong Kong is 15%, so the majority of expats have a huge tax advantage of being here. But, us Americans get screwed. Is there any good reason why the US government taxes us globally??
I joke that I can run to the consulate with my passport if all hell breaks loose here, but so could me and 50,000+ other passport holders.
What makes it even more annoying is that DH has dual citizenship with Ireland, so he could give up his US passport, but if we ever want to move back to the US it's obviously not worth it. Ugggh. It's not fair [said with a bratty whine like my 4 year old].
I know most of us are in the same boat, so I'm preaching to the choir, but I just needed to whine. Thanks for indulging me.
Re: I'm going to just whine a bit about being American...
Good point. It just occurred to me that we have an ex-expat in the Oval Office. He's probably not going to lobby for us, huh? ;-)
If you have to pay taxes in the US, too, then that means you're making more than the foreign-earned income exclusion allows for, and I have to say that in that case you don't really have my sympathy
No seriously, though, if I were to ever make that much then I would be annoyed, too.
True, but doesn't the housing allowance make it possible to adjust for some COL expenses? I don't understand how the housing allowance works since I've never even come remotely close to needing to use it, but I thought it allowed you to earn even above the FIE and still not have to pay taxes. That is a completely uneducated, unresearched belief, though, so take it with less than a grain of salt.
The housing allowance counts as income to you and you have to declare it. For example, if the company is paying $2k a month for housing, it pushes the income you must declare up by $48k.
And some of us don't get a housing allowance or a school allowance - but our housing costs are 3 times what we paid in the US and our school costs are twice as much. Luckily we do get 2 trips home a year, but as previously mentioned, we have to pay tax on that as if it were income.
I know, whining about making more than the exclusion amount is bratty. It's just that the person sitting in the office right next to DH makes the same salary, but 30% more is in his pocket each year compared to us - only because we're American. That's a lot of money we are losing, which DH rightfuly earned, which we see no benefit from in the way of "roads, police, public schooling" because we aren't there using them. And that's what I'm really complaining about.
I actually don't mind paying taxes for services I don't use (I'm such a socialist) but I do mind taxation without representation. No one in Congress seems to have the expat minority's back when it comes to issues that concern us. I guess I shouldn't whine, since so many other minorities have the same problem.