Are citizens of one country who are working in another country?

Thirteen US states refuse to extend voting rights to persons who have never lived in the United States but are US citizens by virtue of the US citizenship of one or both parents. Despite being ineligible to vote, these overseas citizens are subject to all of the tax reporting and payment obligations incumbent upon all other United States citizens, and hence present a textbook case of taxation without representation. American Citizens Abroad favors the correction of this inequitable treatment through extension of voting rights by all US states to any overseas American having a parent previously resident in that state, irrespective of whether he or she has ever resided in the US.

ACA, Inc. favors the unhindered exercise of voting rights for eligible overseas Americans. ACA has consistently supported defensive legislation and litigants engaged in the business of assuring that this fundamental right be available without excessive bureaucracy. We favor the use of clear, simple and straightforward voting and ballot request documentation, and rigorous procedures enabling confirmation that all ballots voted were properly tabulated. See: Supreme Court Upholds ACA Position on Voting Rights

As part of ACA’s commitment to Overseas Americans’ Voting issues, ACA sits on the Advisory Board of the US Vote Foundation (www.overseasvote.org) a non-partisan, non-profit voter assistance organization dedicated to helping American citizens overseas and in the military participate in elections. Working with organizations such as US Vote Foundation insures that ACA is doing its upmost to advocate for overseas Americans voting rights. ACA also participates in the annual voting summit held in Washington, DC. 

US citizens living and working overseas can vote in Federal elections, and in some cases State elections however, as a group their vote which represents thier interests and concerns, is spread of 50 states and 435 Congressional districts.  It is difficult therefore to get a focused attention to the communitys' issues from any one Representative. Unlike other countries who have Delegates or Representatives specifically for their exptraite citizens, the US does not even have a non-voting Representative which is afforded to America Samoa (pop. 49,710), The District of Columbia (pop.702,000), Guam (pop. 171,843), Northern Mariana Islands (pop.57,557), Puerto Rico (pop. 2.7M) and the US Virgin Islands (pop.103,347). 

Another important body representing US citizens overseas is the Americans Abroad Caucus. Founded in 2007 in the House of Representatives, this Caucus counts about 25 members at present, representing many states and all regions of the nation, from the West Coast, the Mid West, the South and the East Coast. The Caucus is co-chaired by Carolyn Maloney (D-NY) and Maria Salazar (FL-27). ACA maintains ongoing contact with the Caucus Co-chairs and updates the Caucus on issues affecting Americans living and working overseas.

The National Taxpayer Advocate is Your Voice at the IRS and its organiation, the Taxpayer Advocate Service (TAS) is an independent organization within the Internal Revenue Service (IRS). Its job is to ensure that every taxpayer is treated fairly and that you know and understand your rights.  Alongside of TAS is the Taxpayer Advocate Panel (TAP) consisting of 75 volunteer members, including a represenative for US citizens living and working overseas. These volunteers gain insight from taxpayers, identify taxpayers’ issues, and make suggestions for improving IRS service and customer satisfaction.

The United States Government does not have a complete count of the number of Americans living and working overseas. ACA's recent research in support of Residence-based taxation (RBT) estimates the overseas US citizen community (non-military) at 4 million. 

The Federal Voting Assistance Program (FVAP) estimated in 2018 that there were 4.8 million US citizens overseas (military and civilian) https://www.fvap.gov/info/reports-surveys/overseas-citizen-population-analysis

The US State Department calculates the current overseas Americans community at 9 Million (US State Department Chart of Statistics).  The State Department calculations are based on estimates from passport applications and birth registrations at embassies and consulates, and a variety of other sources. One source is consular registration, a practice more common in high-risk countries (Columbia, Iraq) than in low risk (France, Spain) which is often used for estimating for evaucation purposes.

An inaccurate count of the community leads touching on various areas, often leading to harmful regulations and legislation because the Congress either thinks the community it larger or smaller than its actual size and does not understand the make-up of the community.  ACA Global Foundation's reserach work with District Economics Group (DEG) is helping to correct the record.  Fielded to help with revenue estimations for Residence-based taxation (RBT) it is providing a more accurate picture of the tax and investment make-up of Americans overseas. 

Most US citizens residing abroad have not been included in the decennial US census since 1970, shortly before overseas Americans gained their right to vote in federal elections. Prior to that, varying stances had been taken over the years. An excellent report on the historical background by Karen M. Mills was published in 1997: Americans Overseas in US Censuses.

The US Census Bureau is not constitutionally mandated to count Americans abroad. Under pressure from ACA and other overseas American groups, the Census Bureau carried out an unsuccesful test enumeration in 2004 of Americans in France, Kuwait and Mexico "Counting Americans Overseas as part of the Decennial Census Would not be Cost Effective" ; and finally in September 2004,"2010 Census: Counting Americans overseas as Part of the Census Would not be Feasible."

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An expatriate, or expat, is an individual living and/or working in a country other than their country of citizenship, often temporarily and for work reasons. An expatriate can also be an individual who has relinquished citizenship in their home country to become a citizen of another.

• An expatriate is somebody who has left their country of origin in order to reside in another country.
• Expats may leave home for work reasons and seek more lucrative employment in a different country.
• Expatriates may live for a while overseas or completely renounce their citizenship of one country in favor of another.
• Retiring abroad has become an increasingly popular option.
• The IRS may impose an expatriation tax on individuals who renounce their citizenship, usually based on the value of a taxpayer's property or income in the United States.

An expatriate is a migrant worker who is a professional or skilled worker in their profession. The worker takes a position outside of their home country, either independently or as a work assignment scheduled by the employer, which can be a company, university, government, or non-governmental organization. If your employer sends you from your job in its Silicon Valley office to work for an extended period in its Toronto office, you would be considered an expatriate or "expat" after you arrive in Toronto.

Expats usually earn more than they would at home, and more than local employees. In addition to salary, businesses sometimes give their expatriate employees benefits such as relocation assistance and housing allowance.

Living as an expatriate can be exciting and present an excellent opportunity for career advancement and global business exposure, but it can also be an emotionally difficult transition that involves separation from friends and family while adjusting to an unfamiliar culture and work environment. Hence, the reason behind the higher compensation offered to these migrant workers.

Much expatriation occurs during retirement. While most Americans spend their retirement in the U.S., a growing number are opting to retire overseas. People are motivated to relocate abroad at an older age for several reasons, including lower cost of living, better climate, access to beaches, or some combination of those and other reasons. But it can also be tricky to navigate taxes, long-stay visas, and the language and cultural differences experienced when settling down in other countries.

Popular retirement destinations include countries in Central America, the Caribbean, and parts of Asia.

A common choice presented to a retiree expat is between permanent residency and dual citizenship. Note that neither dual citizenship nor residency gets you out of filing a U.S. tax return every year. It is both surprising and burdensome, but Americans still have to pay income taxes wherever they live, and they owe it no matter where their income was earned.

You may also have to file an income tax return in your country of residence, although most deduct the amount American residents pay to the U.S. via treaties that minimize double taxation.

If you're a retiree or near-retiree who's on the fence, you face a tough decision that will require some soul searching and research—and maybe a trip abroad (or several) to test the waters before you make any decisions.

For Americans working abroad as expatriates, complying with United States income tax regulations is an added challenge and financial burden because the U.S. taxes its citizens on income earned abroad. However, to avoid double taxation, the U.S. tax code contains provisions that help to reduce tax liability. Taxes paid in a foreign country can be used as a tax credit in the U.S., which when applied against the expat’s tax bill, reduces it.

The Foreign Earned Income Exclusion (FEIE), for example, allows expats to exclude from their tax returns a certain amount of their foreign income, which is indexed to inflation. For 2022, this amount is $112,000. An expat that earns, say $180,000, from their job in a foreign country that is tax-free will only need to pay U.S. federal income tax on $180,000 - $112,00 = $68,000.

The FEIE does not apply to rental income or investment income. Therefore, any income made from interest or capital gains from investments will have to be reported to the IRS. The Foreign Tax Credit (FTC) is a provision that ensures expats are not double-taxed on their capital gains. For example, assume an expat falls in the 35% income tax bracket in the U.S. This means their long-term capital gain on any investment is taxed at 15%.

Since the FTC provides a dollar for dollar credit against taxes paid to a foreign country, if the expat paid 10% tax to the country where they work, they'd only have to pay 5% tax to the U.S. Likewise, if they pay no tax to the foreign country, they’ll owe the full 15% tax to the U.S. government. If the income tax paid to a foreign government far exceeds the amount of the credit (because the foreign tax rate far exceeded the U.S. rate), the expat will forfeit that amount. The credit, however, can be carried into the future.

An individual who has renounced their citizenship in their home country and moves to another is also referred to as an expatriate for tax purposes and is subject to an exit tax known as expatriation tax.

According to the Internal Revenue Service (IRS), the expatriation tax provisions apply to U.S. citizens who have renounced their citizenship and long-term residents who have ended their U.S. residency for tax purposes, if one of the principal purposes of the action is the avoidance of U.S. taxes. This emigration tax applies to individuals who:

• Have a net worth of at least $2 million on the date of expatriation or termination of residency
• Have an average annual net income tax liability that is more than $172,000 (if the expatriation date was in 2021) over the five years ending before the date of expatriation or termination of residency
• Do not (or cannot) certify five years of U.S. tax compliance for the five years preceding the date of their expatriation or termination of residency

Living and working in another country for an extended period of time can have its benefits. These can range from new experiences and adventure to more practical considerations like a lower cost of living or being closer to extended family abroad. Depending on where you settle, you may also get government perks like free healthcare and education and more favorable taxation.

There are also some potential drawbacks. Regarding taxation, unless you fully relinquish your American citizenship, you will still need to file tax returns each year and may need to pay taxes to Uncle Sam, even on income earned in your new country.

You'll also be a long way from home, potentially. This can make seeing friends and family more difficult, and time zone differences can also interfere with finding a good time to link up by phone or video chat. Learning a new language and customs can also be difficult for some, and certain items or products that you like may not be available where you live. And remember that not all countries enjoy the same level of political and economic stability that the U.S. does.

Pros

• New experiences and maybe a better climate

• Potentially lower cost of living

• Potential access to affordable healthcare

Cons

• Potential for double taxation

• Long way away from friends and family

• Language, cultural, political, and economic barriers

• Potential challenges securing the proper visa

An expatriate or "expat" is somebody who leaves their country of origin and settles abroad for an extended period of time, often permanently.

If you are an American citizen and move to another country and plan to stay there, you have become an expat.

The United Arab Emirates (UAE) and the U.S. follow Saudi Arabia in the rankings for the largest number of expats. The expat population makes up 98.4% of Saudi Arabia's total immigration population. Poland, Portugal, and Sweden had the smallest expat populations. Qatar had the highest proportion of expats compared to its total population, at 70.9%.

Americans living overseas still have to file U.S. tax returns unless they relinquish their American citizenship. Several international tax treaties exist to help minimize double taxation.

When people relocate to a foreign country, they often find comfort in seeking out other foreigners, especially from their home country. Expat communities are enclaves of people from a similar national origin, often with their own school and shopping options. In many countries, English-speaking enclaves are called "Anglo" communities.