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[quote=Anonymous][quote=Anonymous][quote=Anonymous]The taxes are complicated because we have to report both overseas and US income and the US income comes from multiple sources (rental property, investment portfolio). It's primarily a pain to make sure everything's reported correctly. [b]I don't think it's more complicated than someone in the US with multiple income sources[/b]. [/quote]

This is quite wrong. Any US citizen living abroad needs to be very careful. You have to work with US tax code, expat country’s tax code, treaty provisions, and any additional legislation, like non-habitual residence. For example, we are in Portugal and did a Roth conversion last year. US tax law applies a penalty, of course. What we didn’t realize was that the distribution from the IRA to fund the Roth is treated as deferred income in Portugal because we are under retirement age and therefore have no mechanism for receiving a [i]retirement[/i] distribution, so the only other thing to call it is regular income. So in addition to US fees that we expected, it would have been another 48% tax on the PT side that we hadn’t forseen. We recharacterized and unwound everything in the end to avoid this. But you can see that not knowing all levels of legislation well can lead to a hot, expensive mess. [/quote]

The question was directed to my own experience as an expat and I responded based on our current experience in Dubai, which has no income tax and does not have a tax system that affects our taxes or income in the US. It is quite simple for us in this regard. Otherwise what you say is valid in that expats in other, particularly developed, countries have to be careful about their double taxation situation. Our taxes were more complicated when we lived in the UK. It became more simple once in HK, and much more simple in Dubai. [/quote]

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