Maintaining US citizenship, Pros/ Cons?

[jon1]

Gene,

I just got word from one of my buddies in the states on this question (he is USMC retired, looking to move here next year).. Without going into all the deep discussion, only wages on a W2 can be eligible for the Foreign Earned Income Credit (provided that you earned the $ overseas and meet the eligibility requirements)...

Oh well,

Jon

[Gene and Viol]

Originally Posted by jon1

Gene,

I just got word from one of my buddies in the states on this question (he is USMC retired, looking to move here next year).. Without going into all the deep discussion, only wages on a W2 can be eligible for the Foreign Earned Income Credit (provided that you earned the $ overseas and meet the eligibility requirements)...

Oh well,

Jon

Thanks Jon for the information. That will help people for sure. There are some that do work here in country and pay US taxes. So if they have kids they should be able to claim the credit.

Gene

[jon1]

Gene,

This is for anyone (not just people with kids). The Foreign Earned Income Credit is specifically for US citizens working abroad (Foreign Earned Income Exclusion). This year's deduction was $92500 (provided that you were out of country for 330 days or more). So for most people working abroad they pay almost zero taxes. However, any income above $92,500 is taxed at a higher rate. For example, a person earning $120,000/yr that has a taxable income of say $20,000 after deductions, would pay the tax rate for $120,000 income on the $20,000 taxable income.

Hope this helps,

Jon

[Jester2]

You will always be a US citizen. As long as you have your US passport you will be a citizen and I’m not sure you can even give up your citizenship and why would you want to do that.. How could you travel or have a passport if you did? An American can be a resident of other countries but I have rarely seen anyone become a citizen and when they did they always and forever have an American birth certificate. Did in not understand your question or do you think you give up citizenship because you live in other places?

[Jester2]

Originally Posted by mrtibbs

Hi all!!

I will moving to the Philippines with the next 2 years perhaps, and I an doing as much research now to prepare. I am wondering what those of you there already, have done regarding your US citizenship? Have you followed the policy requirements as stated on the State Department website regarding maintaining your citizenship, or have voluntarily withdrawn it?

The term 'ex-patriate" is used frequently regarding those who have moved and live abroad. To better help myself understand the meaning that word, i looked it up in the dictionary, the difinitions are in part as follows:

1) to withdraw (oneself) from residence in one's native country.
2) to withdraw (oneself) from allegiance to one's country.

With regards to the second stated difinition, what is the pros and cons in withrawing your citizenship? Also , what are the pros an cons with maintaining it. I think maintaining citizenship would be a tremendous ally in the event of needed assistance from the US Embassy in Manilla, if that should ever need to be.

It is my hope here that I have presented my question without too my confusion and will be most interested in all opinions and experiences you all have had there.

Thanks in advance

You will always be a US citizen. As long as you have your US passport you will be a citizen and I’m not sure you can even give up your citizenship and why would you want to do that.. How could you travel or have a passport if you did? An American can be a resident of other countries but I have rarely seen anyone become a citizen and when they did they always and forever have an American birth certificate. Did in not understand your question or do you think you give up citizenship because you live in other places?

[Phil_expat]

Originally Posted by jon1

Gene,

I just got word from one of my buddies in the states on this question (he is USMC retired, looking to move here next year).. Without going into all the deep discussion, only wages on a W2 can be eligible for the Foreign Earned Income Credit (provided that you earned the $ overseas and meet the eligibility requirements)...

Oh well,

Jon

I have a friend in the Philippines that works for one of the two major mail services (UPS or FedEx). He spends less than 4 weeks in the USA a year. He can and does take the the deduction.

[jon1]

Yes he can take the deduction as he lives/works overseas and spends less than 35 days in the US/US territories per year. Key thing is it's income listed on a W2 not pension income.

[Phil_expat]

Originally Posted by jon1

Yes he can take the deduction as he lives/works overseas and spends less than 35 days in the US/US territories per year. Key thing is it's income listed on a W2 not pension income.

The part I do not understand is he works for a USA company and get a W2 each year to file. He is based in Alaska most of his flights are to Asia and the Middle East. The decisive thing in his case is he is in the U.S.A. less than one month a year. Seem to me a person working for the U.S. embassy in Manila could also claim the deduction.

[jon1]

As long as you are earning the $ from a US Co and are physically outside of the US for 330 + days/year you are eligible. Government employees are not eligible (refer to the link I posted previously). I have been doing contract work overseas for a US Co for 5+ years now and have been able to take advantage of this every year. It makes a huge difference...

[Phil_expat]

Originally Posted by jon1

As long as you are earning the $ from a US Co and are physically outside of the US for 330 + days/year you are eligible. Government employees are not eligible (refer to the link I posted previously). I have been doing contract work overseas for a US Co for 5+ years now and have been able to take advantage of this every year. It makes a huge difference...

Thanks...