this post was submitted on 07 Nov 2024
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You Should Know

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why: so the government won't be able to use your money for whatever the fuck they're planning for the next 4 years.

as a traveler, none of my money has been funding Israel, for example.

one-step method: you basically fill out one extra tax form called FEIE while you're doing your taxes, write down the dates you were outside of the country, and then since you aren't in the country and are not receiving any services from the US, you don't have to pay income tax up to a certain amount (it's a little over 125k this year).

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[–] [email protected] 8 points 2 hours ago (1 children)

However, since you don't pay taxes on that money, it can impact which kinds of retirement accounts you can use based in the US, if any. Also, trying to invest as a US citizen outside the US can suck because of all the agreements with US banks. Many Japanese platforms, for instance, won't touch me because of US reporting requirements. I also can't functionally use the tax-advantaged retirement accounts here because many amount to what are called PFICs by the IRS which requires paperwork and are taxed punitively more than wiping out any advantage the retirement accounts would have.

You're also going to have a rough time getting a US investment account if you don't have one already. Then you have to figure out how to have a US phone number because two-factor auth basically requires it for any bank or anything that will touch you.

There are other "fun" things about being a US citizen living abroad.

[–] [email protected] 4 points 1 hour ago (1 children)

"However, since you don't pay taxes on that money, it can impact which kinds of retirement accounts you can use, if any"

The math works out in your favor.

wouldn't you rather have that money earning interest now rather than receiving a few hundred later on when you probably don't need it as much?

"Also, trying to invest as a US citizen outside the US can suck because of all the agreements with US banks."

it can suck, and it can also be awesome.

I see you're speaking specifically to Japanese banking standards, which I would agree are one of the more difficult countries for a US citizen to interface with.

but that's a great thing about there being about 200 countries.

Bank somewhere else if you want to.

try Hong Kong or China or Thailand or Portugal or Sweden or you know, a lot of countries.

you don't have to live in the country you bank in.

[–] [email protected] 3 points 1 hour ago

Yeah, some is specific to Japan, though there will be similar hurdles anywhere the US has an agreement (and that the target country's institutions actually follow it, I suppose).

I have a couple of retirement accounts in the US that I contributed to before (I moved overseas in my early 30s) that I basically can't touch for a number of reasons right now. Just wanted to throw it out there.

[–] [email protected] 10 points 3 hours ago (1 children)

It might be interesting to crosspost this to [email protected]

Also, I know you mean good, but this isn't relevant to probably a high number of Lemmy users who are not US citizens

[–] [email protected] 2 points 3 hours ago (1 children)

No, as labeled, this is a US specific tax procedure that people who don't pay US taxes won't be able to take advantage of.

but lucky for them, most of them don't have to!

most countries outside of the US have a similar procedure included in their far more citizen friendly tax codes.

the us is way behind other countries on...well a bunch of stuff, but with taxes specifically, you don't usually have to declare that you're not in the country if you don't pay taxes, you just don't pay the relevantaxes and the government only bothers you if you're a big old liar.

[–] [email protected] 4 points 3 hours ago (7 children)

I'm sorry, I'm not sure I get your comment. If this is a US specific procedure, then wasn't my point that is isn't relevant to non US citizens Lemmy users correct?

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[–] [email protected] 23 points 4 hours ago (2 children)

I always find it mad as hell that Americans have to pay tax in the US even if they are living and earning elsewhere

Especially given generally Americans are pretty allergic to reasonable taxation

[–] [email protected] 6 points 4 hours ago (1 children)

yeah it is totally banana stacks, and nobody tells anybody else how to get around that, of course.

since nobody knows the sacred knowledge anyway.

some tax guy, not my tax guy, just a random guy who worked in taxes, offhandedly mentioned it to me like it was no big deal one day and I was like whaaaat?

most of the expats I know just don't pay taxes because they're dumb, or they're paying taxes that they don't need to because nobody told them about the FEIE.

[–] [email protected] 5 points 3 hours ago (2 children)

You still need to file every year. An advisor at least here in Germany can do both countries, but you pay a premium for that.

[–] [email protected] 1 points 23 minutes ago

I heard you need to file every year even if you've never lived in the US.

[–] [email protected] 3 points 3 hours ago (1 children)

I addressed that in a comment but I did not include that in the body.

fixed.

The FEIE is super simple to fill out.

[–] [email protected] 1 points 1 hour ago (1 children)

pretty sure you have to fill out the 2555 as well bro

you also have to pay tax where you are domicile, aka where you live

[–] [email protected] -1 points 1 hour ago* (last edited 1 hour ago) (1 children)

"...the 2555 as well..."

nope, not "as well", the 2555 is the single FEIE form I am explaining about in this post.

"you also have to pay tax where you are domicile"

nope, inclusive taxes are usually paid directly to the foreign government.

you can claim a US housing tax exemption for the same reason as the FEIE, but paying taxes on your foreign housing is usually unnecessary.

[–] [email protected] 1 points 1 hour ago (1 children)

yeah ok the 2555 is the FEIE you mentioned.

its important to note that if youre within the US for more than that 35 day exemption, you start to pay taxes pro-rata.

I think you agreed with what I said just using different words about paying taxes where you do live- yes, you pay them directly to the government where you are domicle.

[–] [email protected] 0 points 1 hour ago (1 children)

"yeah ok the 2555 is the FEIE you mentioned."

yeah, that's why i said it, haha.

"if youre within the US for more than that 35 day exemption, you start to pay taxes."

are you going to rewrite everything I said in the post and comments?

to me?

"you pay them directly to the government where you are domicle. "

you are!

You're paraphrasing my words back to me.

huh.

curiouser and curiouser.

[–] [email protected] 2 points 1 hour ago (1 children)

you know, it's clear that you're trying to be helpful to folks, but you come off like an asshole. just an fyi!

[–] [email protected] 0 points 1 hour ago* (last edited 57 minutes ago) (1 children)

I find a lot of things funny.

your comments are funny.

you sent me two comments, the first of which was wrong on both counts and sounded like it was straight copy pasted from something you just searched,

and then after I corrected you on those points,

without any acknowledgment of your mistakes, you sent a second comment that paraphrased three things I had written earlier to me.

Why?

what was your end game?

I know there's foolery in there somewhere, and I don't stand for foolery!

are you trying to sounds smart by repeating interesting things I said in this post?

repeat them to other people, they will be impressed.

but I rode those things.

Why?

what was the point of your first and second comments?

it sounds like you were trying to "um actually" me, but didn't know what you were talking about, which is hilarious.

I guess that made you feel bad.

try not to one-up people unless you at least have your facts right.

and definitely don't try to one-up people by repeating the things they wrote back to them.

that won't work!

[–] [email protected] 1 points 41 minutes ago

you're honestly a strange person.

so, ive lived outside of the US for over 15 years and have filed taxes where i live and back in the US, where I file the 1040 and the 2555, because you have to. You don't only fill out the 2555. I know a bunch of americans here and never once have I heard of the 2555 called a "FEIE Form" the way you're describing it.

You said "you don't pay tax on the first approx 125k", and I pointed out that you absolutely do pay tax, just not to the US, you pay to the government in the country where you're living. its not tax free, its just to the government of Australia or wherever you live instead of the US.

I also mentioned that people will pay tax on earned income under that 125k if youre in the states over 35 days, but that its prorated, so its not that you pay 100% of taxes all of a sudden, it's what you would pay divided by 330 (if you were one day over, or 329 if you were over by two days, etc.)

just trying to expand and clarify on your post. apparently its your area of complete expertise and anyone saying anything is just googling shit to bask in the glory of your genius, though. stay cool

[–] [email protected] 2 points 3 hours ago

I read somewhere that Eritrea (the North Korea of Africa) is the only other country that has this policy.

[–] [email protected] 72 points 6 hours ago (5 children)

But if you earn over the threshold, you're expected to pay taxes to the US government, no matter where you're actually living or working, no matter if you're also paying taxes wherever you currently are. The US is the only country in the world to assert that it has the right to tax its citizens remotely in this manner. It's not normal.

[–] [email protected] 35 points 6 hours ago (1 children)

The US has double taxation treaties with over 60 countries. When you pay taxes somewhere else, you deduct all of that tax from your US taxes above the $125k.

Though I definitely agree the IRS shouldn't need these treaties, because if you're not living there, why should you even need to file?

[–] [email protected] 1 points 2 hours ago

It’s Navy SEAL protection money.

[–] [email protected] 12 points 6 hours ago (2 children)

They also charge you a crazy exit tax if you want to give up citizenship in order to save on taxes. They always get their pound of flesh.

[–] [email protected] 1 points 1 hour ago
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[–] [email protected] 3 points 5 hours ago (1 children)

That said, if you’re making over 100k trumps tax cuts will probably be pretty nice for you.

[–] [email protected] 4 points 4 hours ago (1 children)

Not if you live in a state with state and local income tax. They capped SALT deductions, so you’re basically paying tax on taxed income.

[–] [email protected] 2 points 4 hours ago (1 children)

But if you live overseas you in fact do not live in a state.

[–] [email protected] 3 points 2 hours ago (2 children)

Some states still require you to file even if you don’t live there, but have ties, and may tax your income.

[–] [email protected] 1 points 2 hours ago

Further, not doing so could impact things like voter registration depending upon the state. The whole system of US voting is a mess since it's all at the state level.

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[–] [email protected] 7 points 4 hours ago (2 children)

Unless you renounce US citizenship of course. I understand it's a bit extreme, but it is a solution

[–] [email protected] 5 points 4 hours ago* (last edited 4 hours ago)

do you mean "another option to avoid paying taxes is renouncing your citizenship?"

in which case, yeah, extreme and still an option.

but the FEIE is way simpler and you can keep the few perks US citizenship still affords its rabble.

[–] [email protected] 3 points 4 hours ago

Which isn't free btw.

[–] [email protected] 4 points 4 hours ago (1 children)

I'm seriously tempted to sell all my stuff and just become a nomad.

Sounds pretty dreamy all in all.

[–] [email protected] 4 points 4 hours ago (1 children)

it's pretty great.

and it's just about as easy as you have described.

If you have any questions, I am happy to answer.

I've been doing this a long time and I've helped other people start traveling.

[–] [email protected] 4 points 4 hours ago (1 children)

I guess my only question is, if I sell everything and liquidate all of my assets I would probably have like 30 grand, maybe more maybe less.

How long is that going to last me while I'm wandering, and what options are there to keep money rolling in?

[–] [email protected] 4 points 3 hours ago (1 children)
  1. tldr: "30 grand will last you at least 5 years of very comfortable living if you're at all trying to budget wisely.

  2. the easiest and most immediately profitable is English teacher, but remote work is vast and covers every field, so it really depends on what you're interested in.

1 full)

totally depends on your habits and proclivities, but I lived on less than $300 a month for about a year. a lot of hostels in Asia and Europe have monthly discounts and they're already like $7 a day. in Asia they can be $2 a day for a bunk bed in a room.

private rooms are 10 to 15 bucks a day, but if you're going to do that then just go to a hotel and pay for the month, which you can easily get for $200 to $300 a month all utilities included.

I've been doing this a while, so right now I'm living in India paying $300 a month for a private two-bedroom two bathroom full kitchen, living room and dining room house plus rooftop terrace parking garage, the whole package, all utilities included plus free unlimited Wi-Fi.

about $0.90 will get you at one entree of chili goby, 2 to 4 rotis and a side of dal or curry.

kabobs are about $0.20 here, potstickers are up to $0.10 each.

anyway, you can live extremely cheaply in the beginning and then figure out what you want and go from there.

If you have 30 grand and no experience traveling, you can rent private condos or houses in a couple dozen countries off tge top of my head for less than 500 USD a month, all utilities included.

in the cheaper countries, you can spend $20 a day eating out at the fancier restaurants or go to the mom and pop shops or cook yourself and spend $1-3 a day on simpler meals.

If you want to pamper yourself and live in more expensive countries, you can double all those prices, but the more you travel the better you'll get at traveling and finding good prices.

30 grand will last you at least 5 years if you're at all watching your money,.

annually, you only need a couple thousand to live indoors and eat as much as you want, several thousand to to live privately end comfortably and enjoy entertainment everyday, and a few thousand after that to splurge most of the year.

2 full)

important consideration is that you only need to make five grand a year for all of your expenses well traveling in the more affordable countries (of which there are dozens), anything after that is play money.

If you have zero skills or certifications, English teaching is the easiest and quickest way to make money. you're instantly making $12 to $20 an hour repeating primary colors and fundamental vocabulary to smart well-behaved children for 45 minutes at a time.

you can get a tefl certification for 40 bucks on Groupon, that lasts for a lifetime and increases your pay up to $20 even without experience.

or you can just fly over to China and you'll get a job that week starting at an absolute minimum of $12 if you fuck up the interview and dress like a homeless person.

Last I checked, Saudi Arabia (and some provinces in China) was paying $6,000 US a month for English teachers.

that's the easiest, but there are plenty of other jobs you can do.

there are too many jobs to list, you can write articles if you're good at writing, you can get free it certifications and work as an SEO optimizer, you can literally pick berries and work seasonally in some countries.

I knew a Spanish couple who are just trying to choose a country and they just moved to whichever place had berry picking work that year, worked a couple days a week.

If I know your interests, talents or proficiencies I can suggest more specific jobs in that field, but again, you only need to make five grand a year to live very comfortably, and you only need a couple grand to live in a dorm and eat good food everyday.

If you have those savings you're talking about, you have a minimum of 5 years to figure out a way to make $5,000 bucks a year to maintain your standard of living, although you'll probably save money the longer you travel.

[–] [email protected] 3 points 2 hours ago (1 children)

I'm definitely a jack of all trades, but I have a bachelor's in IT and like 10 years of work experience.

I feel like the competition is pretty high for people in that category though, but I could probably handle a couple hours a week of berry picking and English teaching.

[–] [email protected] 2 points 2 hours ago (1 children)

yup yup.

any bullshit part-time job in IT will more than fund your lifestyle indefinitely.

get a job you like? even better. and you have 5 years to find that job that can pay you 10% of the US salary and you'll still save $1,000 a month without trying.

and you can always try out other jobs just for fun since you don't have the unrelenting financial pressure of the US ripping dollar bills out of your account everyday

oh!

I've got a great one.

are you tall?

China still hires tall foreigners to wear suits to walk around buildings and pretend they're advisors.

so you dress up in a doctor's coat and pose with a hospital administrator for a photo op, maybe give a prewritten speech at a textile conference, they'll pay you to do that, more money and work. the taller you are hahaha.

anyway,, you're all set.

find any job that pays you $1 to $2,000 a month, sell all your shit and fly to whatever country.

shoot and you're at the end of this year too, so if you leave before the end of January next year, and stay out the rest of the year, you'll be able to use the feie for your 2025 taxes.

go ahead and show me any other questions if you think of them

[–] [email protected] 1 points 2 hours ago (1 children)

Yeah I'm 6'1 but I'm native American so I don't think I will fit into their thing cuz they tend to prefer white guys

[–] [email protected] 1 points 1 hour ago

prefer, yes, but especially for the walking around job they'll take anybody tall.

their prejudices are real flexible in that regard.

[–] [email protected] 2 points 4 hours ago (1 children)

https://getyarn.io/yarn-clip/a421c712-bdee-42c4-9a0b-5e5c30a05c58

Sorry for the link but it's the first one I found to the Python sketch.

[–] [email protected] 2 points 4 hours ago

No apologies necessary, thanks for the clip.

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