Author Topic: Is being a US expat unreasonable?  (Read 356 times)


  • 5 O'Clock Shadow
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Is being a US expat unreasonable?
« on: September 28, 2018, 07:32:51 AM »
Hello Staches,

I am form the US, but currently live in Australia. Thinking about my financial situation (belatedly) I am starting to wonder if I have it all wrong. Are there any expats in the crowd? I need some moral support as a new Mustachian and soon to be immigrant.

I currently earn income from Australia, and a small amount from the US.
If I were to switch my income to all US income, I would be doing contract work, and would not bet the benefits of being a full-time employee. . . (I am assuming there are retirement accounts for self-employed people, I just don't know about them extensively)
And if I continue to work in the US, but live in Australia, I would still be taxed on my US income in Australia because of my residence.
Plus, I accidentally invested in Australian ETF's and I am reading now that the US taxes these heavily as passive foreign investments.

I am so confused, and the more I read into things, the more I realize I don't know, and I feel like I am leaching money from my previous decisions based on "hey, it would be fun to live in Australia."


  • Walrus Stache
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  • Posts: 5702
  • Location: Sydney, Oz
Re: Is being a US expat unreasonable?
« Reply #1 on: September 28, 2018, 06:43:11 PM »
You are going to need some very detailed tax advice from a specialist accountant. This forum is not the place to get it :)

Tax residency rules for Australia are quite complicated, no wonder you are confused!

Worst case scenario you owe tax in both Australia and the US on the same income...


  • Magnum Stache
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Re: Is being a US expat unreasonable?
« Reply #2 on: September 28, 2018, 06:58:52 PM »
So I am not a specialist accountant, but at least a couple of pieces of info/pointers:

-Yes there are retirement accounts for self employed people in the USA. Among other options you can set up at 401k and shelter $18k + ~20% of your total income from american taxes.

-Even though the US taxes worldwide income, it's hard to end up actually owing tax on the same income in the USA and your country of residence.

--If you're in Australia for at least 330 days out of the year, you won't own US income tax on your first $100k/year of income.

--You can also get a credit on your US tax return for foreign income taxes paid that usually works out to either the amount of foreign tax paid, or the amount of US income tax you would otherwise have owed on the same income (whichever is smaller). So in practice you'll generally owe in total the higher of your local income tax rate and the USA's tax rate, but both the entirely of both tax rates combined.

I am not a tax accountant, don't take anything posted above on faith, both hopefully it at least gives you a place to start researching.


  • Pencil Stache
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  • Location: Downunder
Re: Is being a US expat unreasonable?
« Reply #3 on: October 09, 2018, 10:45:00 PM »
You are going to need some expert advice in this situation. (Source: my husband is American)

Of the top of my head
- There are a lot of restrictions for Americans living abroad having US-domiciled bank accounts  & investments.
- There are reciprocal tax agreements between Australia and the US so you should not be taxed twice on the same income but you will need to file in both countries.
- You should be able to claim back any Australian Super you earn if/when you leave the country permanently but again, this may change in the future.
- Are you considered a tax resident of Australia or the US? If it's AU, then the ETFs are not a problem but then the US bank accts may be an issue.

Good luck