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Retirement In Paradise May Be More Taxing Than You Think
by Expat Focus columnist, Casey Bahr
As certain as death, taxes cannot be ignored. Unfortunately, unlike death, they come around more often than once in a lifetime. When people considering expat retirement sit down with their calculators or spreadsheets to measure the feasibility of their plan, one of the big blanks they draw regards their tax situation as residents of their newly adopted country. Nothing takes the shine off paradise quite like finding out that your escape comes with unexpected, hefty fees to a foreign government.
As complex as the U.S. income tax is, it is very possible that the tax structures in your new domicile will make U.S. taxes seem a cakewalk by comparison.
This is especially true in most Third World countries, where taxation feels as if you are single-handedly playing a game of Monopoly against a team of opponents who already own four hotels on Boardwalk and throw nothing but doubles. Of course, a good accountant can shield you from the tax labyrinth, and it is a good idea to consult one while you are still getting your expat sea legs under you. If you want to save money, however, while avoiding surprises, it is best to understand what you might be facing even before you depart for your Shangri-La.
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