Now, my
But I find that reading the new tax reporting rules for Americans living abroad is always an adventure. I have to read the rules, make sure I'm looking at all the relevant forms and instructions, try to figure out if something that changed this year fits in one category or another. All the stuff you guys who can't afford, or don't want, to rely on a tax professional have to put up with, but with two or three more publications and forms that are just for us who live abroad.
This year, the rules have changed again. I never had to mess with schedule B in the past, but now it's not just the interest that requires using that form. Having any foreign bank accounts at all means you have to list them all up on schedule B.
And while I'm on the subject, have you ever heard about TD F 90-22.1 (the poignantly named FBAR)? Did you know that certain kinds of insurance (the "smart" kind, where you get extra coverage, but get a bit more than half back if you don't use it, so-called universal life insurance) will put you in the range of being required to report all your accounts to the US government?
The currency equivalent of $10,000 aggregate in your foreign accounts will put you in the range of having to report all foreign accounts to the US government. And they mean basically anything that could possibly be converted to money. And they expect you to add the maximum in each of your accounts over the course of the year.
If you have one account for your pay to be automatically deposited to and another to have your bills automatically paid from and you make JPY 500,000 a month (Roughly $5,000, how would it be?) you likely bump over the limit without even having any savings.
And if you are sensible and put a month's wages away for the inevitable unemployed periods, or put enough money away to get the family back to the states, that and your regular day-to-day operations bump you into the required reporting range. Any sensible money management will put you over.
If that limit is meaningful at all, it should have risen with inflation over the last thirty years.
Then there is the business about trusts. Trusts are still somewhat protected from taxes, so you can still sort of afford to save up college money for your kids. But if the trust is a foreign trust, the IRS thinks you must absolutely tell them about it. Every foreign trust. I spent a good eight hours trying to figure out whether my kids' insurance policies were trusts or not, including a couple of hours at the insurance company. They aren't, but they could have been.
New rules, except for the FuBAR. I don't know where I'd have squeezed in the time to figure them out if I weren't laid off.
Exceptions to exceptions to exceptions. Reminds me of the math astronomers used to use to explain the motions of the planets, back when the government required them to toe the line on a geocentric universe. You know, Galileo's time and before, when a too-literal interpretation of the Bible verse, of the sun standing still during a war, induced strange impositions on orthodox science.
And it occurs to me that the current mess of the US government grown too big is, in many respects, precisely a problem where laws are trying to match misinterpretations. Such as the idea that increased surveillance will help to reduce "terrorism" events.
(It won't. Attention generally encourages bad behavior, especially inappropriate attention.)
Or the idea that the costs of enforcement in a compulsory tax system won't exceed the costs of non-optimal collection in a voluntary tax system.
Or that a people who refuse to support their own freedom can somehow be forcibly saved from the loss of freedom they are trying to choose.
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Courtesy is courteous.