by David Kuenzi, CFP®, Thun Financial Advisors

2013 ushers in a series of substantial tax increases for all American taxpayers. These changes alter the landscape for efficient investment management and financial planning. Investors seeking to maximize long-term investment returns must factor these changes into their wealth management strategies. This is particularly true for Americans abroad because the 2013 tax changes coincide with other significant tax and compliance changes related to FATCA.

In this note, we review the major changes taking effect on January 1st 2013. Next, we identify aspects of the changes that uniquely affect Americans living abroad. We then discuss a range of possible investment planning strategies that can be applied to mitigate the impact of the new, higher tax environment faced by U.S. taxpayers living abroad.   more ...

Contact Tom for a free, no-obligation discussion of your financial situation if you are a US citizen living abroad or a foreign national living in the USA.

This time last year I was writing about how the European Sovereign debt crisis was coming to a head and that we were seeing continuing improvement in the US economic picture. I suggested that we should avoid European markets until a resolution could be found in Europe, either in the form of an exit of one or more countries or by an unlimited pledge of financial support for needy countries. This turned out to be good advice, as US markets outperformed European markets in the first half of the year but, once the Europeans in essence pledged unlimited support for European banks and it became clear that Greece was not going to be allowed to default, European markets outperformed in the second half of the year.   more ...

To contact Tom for a free, no-obligation discussion of your financial situation please use our US expat investment enquiry form.

I have just returned from the town of Ajijic, a half hour out of Guadalajara, Mexico and home to about 10,000, mostly retired, Americans (as well as a large number of Canadians and even the odd Brit). During my week there, my colleague Marian Wellman and I put on a seminar on the topics of the coming US fiscal cliff, FATCA regulations, and the current investment climate. Much to my surprise, given the dry nature of anything concerning taxes, the seminar was heavily attended and standing room only; with most of the interest directed towards the first two topics – so I thought Expat Focus readers might also be interested in our overview.   more ...

To contact Tom for a free, no-obligation discussion of your financial situation please use our expat IRA / 401k enquiry form.

If you have worked in the United States for any length of time (either as a US citizen or a foreign national) it is likely that you have paid into a US pension account such as an IRA (Individual Retirement Account) or a 401k (an occupational pension plan). The question then arises as to what should be done with such an account once you give up US residency.

There are three alternatives: You can transfer it to another pension account, you can distribute the money, or you can leave it in the current account.   more ...

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 ...