Potential Expat Inquiry Update

[soulskier]

I figured the board might appreciate a new trend we are seeing. As a result of our blog, we receive many emails from mostly Americans and some Canadians, interested in moving to Argentina. Leading up to the election, it would be safe to say 95% of them were left leaning. Then Obama won and there was a sharp drop off on inquiries. Now, we are getting an increase of emails from the far right, many who want to leave before the 2010 tax increase for the rich takes place.

OK, there ya have it, up to the minute trends from Patagonia. ¡Suerte!

 

[RWS]

Interesting. Perhaps I practice law in an aberrational region -- the northeastern United States -- but most of the rich here are ostensible supporters of the Democratic Party. Not left-leaning, to be sure, but hardly open endorsers of the Republican Party.

 

[soulskier]

RWS, the latest was a gun touting Christ follower. PM sent.

 

[RWS]

After reading that, I certainly understand your comments, SS!

 

[Stanexpat]

I can guess what you are hearing. I'd be willing to bet there are crackpots at both ends of the spectrum. Also I think the drop off may be attributable to economic conditions. People who can't sell the homes they live in and have watched the value of their savings erode sharply probably aren't in a position to move anywhere.

 

[soulskier]

Yes Stanley, you would be amazed at some of the things that are sent to us.

 

[Stanexpat]

Yes Stanley, you would be amazed at some of the things that are sent to us.

Actually moving to Argentina to avoid taxes doesn't make any sense. If you are a U.S. citizen you are still liable for U.S. taxes regardless of where you live.

 

[Grazie]

soulskier, hi. I was told yesterday's exchange to Arg. peso is like 3.60 to a dollar.
Monied Americans moving to Buenos Aires, good news for the real estate prices. That will drive prices of rentals and homes (condos, weekend houses, etc) up, up and away. Buenos Aires will be flooded with english speaking expats - wow - latte anyone?

 

[soulskier]

Actually moving to Argentina to avoid taxes doesn't make any sense. If you are a U.S. citizen you are still liable for U.S. taxes regardless of where you live.

Really? I was under the impression that if you earn money in Argentina, you are exempt for 80K in taxes in the US.

 

[steveinbsas]

Actually moving to Argentina to avoid taxes doesn't make any sense. If you are a U.S. citizen you are still liable for U.S. taxes regardless of where you live.

From the following: http://www.taxmeless.com/page4.html


Foreign Earned Income Exclusion

If you have your full time residence abroad for a full calendar year, or live there for 330 days out of any consecutive 12 month period, you can exclude up to $87,600 of earned income from U.S. Income Taxation for 2008 and lesser amounts in earlier years. If you are married, and both of you earn income and reside and work abroad, you can also exclude up to another $87,600 of your spouses income from taxation. These exclusions can only be claimed on a filed tax return and is not automatic if you fail to file your Form 1040 for the year it applies as well as the appropriate forms claiming this exclusion. This is a fantastic advantage for people who live and work outside of the U.S. Earned income is that paid you for your work or services and does not apply to rental income, dividend or interest income, or other types of income that is not paid for your own personal efforts.
You can also claim an additional exclusion from your U.S. taxes in excess of the $87,600, if the rent, utilities, etc. you pay on your residence abroad and other living expenses exceed a standard amount (which is currently approx $13,000 per year) established by the IRS. This exclusion only comes into play when your earnings are in excess of the $87,600 foreign income exclusion and is limited by new laws enacted in 2006 to a maximum of approximately $13,000. Note that over 100 cities in the world have higher allowable housing deductions. See the instructions to Form 2555 to see that list of cities with the higher allowable cost of housing.

U.S. Self Employment Tax

If you are a bonafide employee of your foreign employer (which can mean your own foreign corporation) and have foreign social security and other payroll taxes withheld from your wages, you do not have to worry about paying any social security taxes to the U.S. However, if you are self employed, and no foreign social security is being withheld from your earnings ( in other words an independent contractor) you must file a Schedule C with your U.S. tax return and pay U.S. self employment tax (social security taxes by the self employed) on your net earnings ( after deducting your expenses). The self employment tax rate is 15.3% and is not reduced by the previously mentioned foreign earned income exclusion or foreign tax credits..