Tax Advantages or Disadvantages - US to AUS

[ATL2AUS]

I am having trouble deciphering all of the differences between Australian and US tax law to the point of being able to determine if I will have a net benefit or loss from being a US citizen working in Australia. What is the experience of others who have made the same move?

I will be above the 92k limit for deducting international earned income on my US taxes. I plan to stay multiple years, so won't have trouble declaring my tax home in Australia. There are no "state" taxes in Australia, right? How do other taxes, such as sales tax compare?

Finally, any other hidden taxes or fees (other than superannuation) that I need to know about?

[pcrial]

Originally Posted by ATL2AUS

I am having trouble deciphering all of the differences between Australian and US tax law to the point of being able to determine if I will have a net benefit or loss from being a US citizen working in Australia. What is the experience of others who have made the same move?

I will be above the 92k limit for deducting international earned income on my US taxes. I plan to stay multiple years, so won't have trouble declaring my tax home in Australia. There are no "state" taxes in Australia, right? How do other taxes, such as sales tax compare?

Finally, any other hidden taxes or fees (other than superannuation) that I need to know about?

Hello ATL2AUS, and welcome here,

My wife is an Australian Accountant, and she said in one of the Australian tax schools she attended the instructor began the course saying "don't try to understand the rules, because they don't make any sense." The instructor then explained, if you just blindly follow the rules you won't have any problem.

I'm in about the same place. Sum of my experience is six of one, 1/2 dozen of the other. For 2011, by the time I took USA tax credit for Australian tax paid, it worked out about the same.

Unfortunately, there are some traps in the tax credit for foreign tax paid. The traps involve the AMT (alternative minimum tax). I haven't had this problem, but I can see it lurking there, just waiting to add USA tax in the event you exceed the maximum tax credit. I presume this would be exactly what happens above $92,000.

I've been doing my own USA tax with the H&R Block software for many years. I have a fair understand of USA tax rules, but will perhaps never understand Australian tax rules.

Hope this helps,
Cheers

[outoflv]

I'm not sure about taxes yet, but if you have children who will be attending school in NSW or ACT, you may have to pay. (This applies to temporary visa holders.) Tuition alone in NSW is $4500, not including school fees, uniforms, etc. I believe the fees in ACT are higher.

Good luck!

[mseprice]

I'm also from the US and on a partner visa now leading to a permanent visa. Are you staying long term, because I'm just finding out that my money is stuck here if I do return to the US. Some things to think about... unless anyone has thoughts on how this can be avoided...

Good luck!

-Eva

Originally Posted by ATL2AUS

I am having trouble deciphering all of the differences between Australian and US tax law to the point of being able to determine if I will have a net benefit or loss from being a US citizen working in Australia. What is the experience of others who have made the same move?

I will be above the 92k limit for deducting international earned income on my US taxes. I plan to stay multiple years, so won't have trouble declaring my tax home in Australia. There are no "state" taxes in Australia, right? How do other taxes, such as sales tax compare?

Finally, any other hidden taxes or fees (other than superannuation) that I need to know about?

[_shel]

What money will be 'stuck' there? If you are referring to your superanuation it is not stuck, more that it can not be drawn upon until retirement. And that only applies if you are PR because you can go back to Australia in later years pensionless if you withdraw it and then would be entitled to claim off the state. Only right imo because a pension is not a personal savings account to be withdrawn and spent at your own will. It is an investment for your old age.

[pcrial]

Hi mseprice,

I'm a retired US Citizen living in Australia. I have the choice of depositing my money in the USA, or in Australia. It is six of one and 1/2 dozen of the other. I have a USA debit card that works everywhere in Australia. The conversion to AU $ is 1%.

Then my wife and I have moved money from here to USA bank using bank to bank telegraphic transfer for about $45, plus they take about 1% on exchange rate differences, sometimes more depending on the bank.

So I've moved money both directions with no problems. I do not exchange money on the currency exchange, because using my USA debit card here to withdraw cash has a limit of $1,000 per day, with only a 1% fee. The currency exchange, is more, around 3%.

I just have my USA pensions deposited in my USA bank, then use my USA debit card to buy gasoline, or groceries. How does money get stuck, since it seems to be mine to do as I please, regardless of the source, or how I use it?

Cheers,