US gov't raises income limit for tax exclusion (income tax, living in)

[desibear]

Thought this may be helpful to Americans who are considering move to Toronto. According to the WSJ today, "Many Americans who live and work in other countries will be able to shield more of their pay this year from Uncle Sam's clutches. The so-called foreign earned-income exclusion rose to $87,600 for 2008 from $85,700 in 2007. For details, see IRS Publication 54 at Internal Revenue Service "

[glxyman21]

This not so old and arbitrary law needs to be repealed. The U.S. is one of the few countries that tax people based on citizenship and not on country of residence. It is quite unjust to force people to pay income tax to a country where they are not living and not gaining benefits from. The price levels should be over $100,000 if it were adjusted from the original level when it was introduced for inflation and costs of living

[Jadel812]

Now I may be mistaken and please do correct me if I am wrong. That income limitation, does it not include that of your spouse even if your spouse is a Canadian? I think it's absolutely rediculous to force people to pay taxes when you are not benefiting from it.. and please don't tell me anything about Medicare and social security, by the time I am ready to retire I won't be able to afford Medicare nor would there be any social security available for me to get. Yet I am investing so much into social security...what a flipping rip off.

[desibear]

Originally Posted by Jadel812

Now I may be mistaken and please do correct me if I am wrong. That income limitation, does it not include that of your spouse even if your spouse is a Canadian? I think it's absolutely rediculous to force people to pay taxes when you are not benefiting from it.. and please don't tell me anything about Medicare and social security, by the time I am ready to retire I won't be able to afford Medicare nor would there be any social security available for me to get. Yet I am investing so much into social security...what a flipping rip off.

My interpretation, and this is just informed speculation on my part for what that's worth, is that that income limitation applies to just you in this case. Were your wife a US citizen or a green card holder, you would then be able to double the limit.

Oh, if you like these apples so far, you are really going to love this one:

-- Social Security tax: The amount of annual wages subject to the Social Security tax will rise to $102,000 in 2008 from $97,500. The 4.6 percent increase is based on the increase in average wages. How tax code will be adjusted for inflation next year

[LOVE THE U.S.A.]

Hey,
Question to all....

Have you given up your citizenship of the U.S.A. and applied for citizenship to
the country of your choice??
If something was to happen to you or yours would you not turn to U.S.A. for
help, or to the country of you citizenship.
Things have to be paid for...
As to including your spouses in come....once you marry someone from another
country to which country do owe allegence? That is the couontry that you pay
a tax to . IMO not both

GOOD LUCK IN YOUR OUT OF COUNTRY INDEVORS. NO MATTER WHAT I HOPE
THAT IT ALL WORKS OUT IN YOUR FAVOR....

LOVE THE U.S.A.

[Jadel812]

Originally Posted by LOVE THE U.S.A.

Hey,
Question to all....

Have you given up your citizenship of the U.S.A. and applied for citizenship to
the country of your choice??
If something was to happen to you or yours would you not turn to U.S.A. for
help, or to the country of you citizenship.
Things have to be paid for...
As to including your spouses in come....once you marry someone from another
country to which country do owe allegence? That is the couontry that you pay
a tax to . IMO not both

GOOD LUCK IN YOUR OUT OF COUNTRY INDEVORS. NO MATTER WHAT I HOPE
THAT IT ALL WORKS OUT IN YOUR FAVOR....

LOVE THE U.S.A.

Wouldn't that apply to ALL countries..If something were to happen to someone from another country and they returned to their country wouldn't their country have to take them back....YET the United States is one of the FEW countries that double taxes you....... Hmmm I wonder why poorer countries aren't as greedy? It's not like the United States is low on funds....or are they

[chak007]

I am considering a move from Orlando to Edmonton. I am a US citizen. Can someone pl tell me whether I pay full Canadian tax on income there or do I also pay US tax? or both? Does this move mean a higher rate of taxation? Thanks for any insights..
Confused

[Jadel812]

Originally Posted by chak007

I am considering a move from Orlando to Edmonton. I am a US citizen. Can someone pl tell me whether I pay full Canadian tax on income there or do I also pay US tax? or both? Does this move mean a higher rate of taxation? Thanks for any insights..
Confused

Hey Chak, I too reside in Orlando and am contemplating moving to the Ontario region. I do like Missisuagua.if that's spelt correctly. Do you feel you can handle the cold? There is a big difference in whether you know.

[mikeyyc]

Originally Posted by chak007

I am considering a move from Orlando to Edmonton. I am a US citizen. Can someone pl tell me whether I pay full Canadian tax on income there or do I also pay US tax? or both? Does this move mean a higher rate of taxation? Thanks for any insights..
Confused

Both. You only pay US tax on the income above the limit posted in the first post.

[glxyman21]

Originally Posted by mikeyyc

Both. You only pay US tax on the income above the limit posted in the first post.

This is true, but thing thing is that this tax doesn't take into account exchange rate fluctuation (let alone cost of living in another country) so now that the Canadian dollar is equal to the USD you will be at that threshold quickly (lets say even if your wage only increased a few percent a year in Canada, but the rapid appreciation of the currency is what boosts one up into that threshold.) If you plan to never return to the U.S. I personally wouldn't pay it because it is very arbitrary and the the chance of the gov't searching for you and coming after you are minimal as the costs of doing so would outweigh the benefit of the tax amount. People living in the U.S. don't pay their taxes for years or never have.