Things to Consider before Venturing Abroad

By Michael Kaplanidis, CPA, Water Street Associates

Working abroad can be exciting and financially rewarding, especially during our current economic climate. Before agreeing to an overseas assignment with a current or prospective employer, here is a list of things that you should consider:

1. Federal and State tax filing requirements As a U.S. Citizen or resident alien of the United States, you’re taxed on your worldwide income. What does this mean? Working abroad neither precludes you from filing a U.S. Income tax return nor paying income tax. While the IRS extends the filing due date by two months (June 15th) and provides a Foreign Earned Income Exclusion (approx. $91,500 in 2010) to qualified individuals, you’re still required to report your worldwide income on your Federal tax return. State filing requirements for individuals are based on each respective States’ and individual’s domicile or legal residency status and general filing requirements.   more ...

Tom Zachystal (CFA, CFP) is President of Individual Asset Management, a Registered Investment Advisor specializing in investment management and financial planning for expatriates. Click here to send Tom a no-obligation enquiry for financial advice.

For the better part of this year investment markets have been largely trendless. There have been many ups and downs but no clear breakout to either the down-side or the up-side. The current state of things, a slowing and fragile economy in Europe as well as issues with sovereign debt, better economic data in the US, and perhaps a more stable outlook in Asia with lower inflation and still good growth, support the view that we may be in for an extended period of up and down investment market performance. In such a market, and especially given the difficult investment market we recently suffered in 2008-2009, there is a tendency for investors to give up on mainstream investments such as stocks and bonds and to seek better investment returns in more exotic vehicles, or by employing more exotic investment strategies. These products and strategies are often poorly understood by the average investor and heavily sold by certain investment sales people because commissions to the advisor are usually quite high.   more ...

by Sharon Hill, French Mortgage Direct. Click here to send Sharon a no-obligation enquiry for French mortgage advice.

Most people buying a French property need to raise some type of mortgage finance to help them make their dream come true. Often, the Estate Agent selling the property will offer assistance, putting the buyer in contact with a local bank. The local bank will rarely be in a position to offer advice and guidance and the purchaser could end up with a mortgage but no knowledge of the French mortgage market.

Lack of understanding can be catastrophic for buyers especially if they assume that French mortgages operate in the same way as in their home country. Without professional help, buyers could end up having their mortgage application refused by the lender resulting in not being able to proceed with the purchase, or with a mortgage unsuitable for their needs.

When choosing which French mortgage is the most suitable for you, it’s important to understand how property finance works in France.   more ...

Marian Wellman specializes in income tax services for US expatriates living in other countries and foreigners living in the US. She has been an Enrolled Agent (Certified to Practice Before the IRS) since 1985 and is a member of the Tax Advisory Board and a Country Representative for American Citizens Abroad. Click here to send Marian a no-obligation enquiry for US tax advice.

Many people who move overseas for a new job or to retire may be under the impression that they are no longer responsible for filing American income taxes. It's a (somewhat) reasonable assumption. There are 194 countries in the world, but only two of them require that their citizens declare income from anywhere world-wide (citizenship-based taxation), rather than just paying taxes on income where it is earned. And, you guessed it, the United States is one (Libya is the other, but even that could change with their political situation).   more ...

Tom Zachystal (CFA, CFP) is President of Individual Asset Management, a Registered Investment Advisor specializing in investment management and financial planning for expatriates. Click here to send Tom a no-obligation enquiry for financial advice.

In the current low-interest-rate environment prevalent in many developed market economies it makes little sense to park one’s investment money in conservative fixed income investments that offer poor yields; perhaps even yields lower than expected inflation rates. Given the fact that the first few years of Baby-Boomers are now retiring, and people in retirement tend to favor income-producing investments, it seems there should be considerable demand for alternatives to bonds.   more ...

by David Kuenzi, CFP®, Thun Financial Advisors

October, 2011

This article examines the new FATCA law (Foreign Account Tax Compliance Act) and explains the significant impact it will have on Americans abroad. It details how the legislation will force foreign financial institutions to directly report to the IRS on assets held by Americans and why this suddenly makes compliance with many old and new reporting requirements much more critical. Practical implications for Americans abroad of these big changes are discussed and recommended actions are suggested to avoid being caught unaware as the new FACTA rules raise the difficulty of compliance and risks of non-compliance.   more ...

by Muzammil Bashir
www.pensioncalculator.org

When a UK citizen decides to move abroad, he or she has the choice to either continue holding a personal pension fund that is based in the UK, or to transfer the balance to a pension fund in the new country of residence. The latter choice gives more flexibility in terms of investments. If the former choice is made, however, the party will be required to use the bulk of it to purchase an annuity (use an annuity calculator to calculate your annuity) when retirement time comes.

Contacting the appropriate pension provider is the initial step in transferring the pension abroad. Caution should be exercised, however, because the tax benefits are not likely to be greater in another country, and the administration of UK pension funds tends to be better also, so it is important to investigate these issues ahead of time.   more ...

by David Howell, CEO at Guardian Wealth Management

Regular review of all insurance policies held by non-domiciles living or working in Qatar is essential to ensure they provide the cover required.

In particular, anyone who has recently become or is thinking of becoming an expatriate, should re-evaluate all their existing insurance policies to ensure the terms match their needs and that there are no exclusion clauses that could affect the validity of the policy.   more ...

by Expat Focus investment partner, Tom Zachystal

On August 9th Ben Bernanke, Chairman of the US Federal Reserve, made an unprecedented announcement (I guess by now we should be used to unprecedented announcements from the Fed). He announced that the Fed would keep US target interest rates low for two years. Never before has the Fed committed to a time-span for its interest rate policy.

Many investors were disappointed that the Fed didn’t announce a further economic stimulus measure but in fact the actual announcement is much more useful because it helps bring certainty to what has become a very uncertain investment market.   more ...

by Des Cooney Ph.D.

Director of Axis Financial Consultants based in Paris, France

Consider a currency that begins with the letter E……

For over a year now it seems like the Euro has fallen down the rabbit-hole. Politicians in Brussels appear to move from one surreal chain of events to another. One minute everything is upside down, and the next we are all back on our feet again. At the moment all eyes have been diverted to the plight of the US Dollar; however the troubles for the Euro are destined to return.

Whose dream is it anyway?

To fully understand the problems faced, it is necessary to examine the compendium of the Eurozone, which outlines the various events that have taken place since its inception.   more ...