US CITIZEN PAYING TAXES IN IRELAND + USA

suncatch

Was wondering if anyone can help. Im an irish citizen born in Ireland but also have US citizenship having worked there and obtained passport after having a green card. I currently work and live in Ireland but hope to return to US in few years. Was wondering should I be paying taxes in both country's ? I havent filed US taxes since returning to Ireland few years ago

Really Interested

suncatch wrote: »

Was wondering if anyone can help. Im an irish citizen born in Ireland but also have US citizenship having worked there and obtained passport after having a green card. I currently work and live in Ireland but hope to return to US in few years. Was wondering should I be paying taxes in both country's ? I havent filed US taxes since returning to Ireland few years ago

It is my understanding that US citizens must do a tax return even if not resident in US. The good news is Ireland has a tax treaty with the US so any tax paid in Ireland should more than likely cover you.

https://www.irs.gov/individuals/international-taxpayers/u-s-citizens-and-resident-aliens-abroad

L.Jenkins

Would you not discuss this with an Accountant. I know of a few how deal with international taxation in the US and UK.

suncatch

Yes going to talk to an accountant .
Need someone that is experienced with irish and usa taxes. Thanks for the replys

L.Jenkins wrote: »

Would you not discuss this with an Accountant. I know of a few how deal with international taxation in the US and UK.

L.Jenkins

suncatch wrote: »

Yes going to talk to an accountant .
Need someone that is experienced with irish and usa taxes. Thanks for the replys

I'll PM you.

Dr Turk Turkelton

As a US citizen you have to file a tax return every year no matter where in the world you live but unless you are earning over 80k you won't owe anything over there.

dennyk

Yes, you must file a US tax return every year if your income is higher than the filing threshold (about $10k USD for a single person) regardless of whether you are residing in the US or not. This IRS link may be of some help in becoming compliant.

Note that you must also report the values of all of your non-US financial holdings, including ordinary bank accounts, if the aggregate total value in those holdings exceeded $10k USD at any time throughout the year via the FBAR (FinCen Form 114). This form is separate from your annual tax return forms. It can be completed electronically, so it's not too much of a hassle, but you must be sure to report the "high water mark" from the past calendar year for *all* of your financial accounts, including current accounts, savings/credit union share accounts, savings and prize bonds, pensions, brokerage accounts, etc. each year.

You can reduce your US tax liability in a couple of ways. The Foreign Earned Income Exclusion can be used to exclude earned income (that is, income from salary or wages) up to a defined threshold (currently about $100k USD). Note that this exclusion does not apply to unearned income, such as capital gains, interest, or dividends, so if you have significant earnings from those sources, you may still owe US taxes. The Foreign Tax Credit can be used as a credit against your US tax liability based on the amount of income tax you paid on your income in a foreign country. You can only use one of those options, not both, and which one is a better option for you is highly dependent on your personal tax and financial situation. If your only income is from work, the FEIE is probably the easier option.

Also, note that investing in non-US mutual funds or other financial products may significantly complicate your tax reporting requirements, possibly requiring you to pay hundreds or thousands of dollars for professional tax services each year to remain compliant with the IRS reporting requirements for non-US mutual funds and other non-US assets. You may also be exposed to increased tax liability on investments in foreign funds. It's best to consult with a US tax professional with experience in foreign investments before making any investments in non-US funds.

This IRS site has a lot of useful information for international US taxpayers.

Benny122

Hi guys looking for some information please from anyone that would know.

My boyfriend and I are thinking of buying an investment property in Detroit for €25k to rent out and receive a rental income of $7500 before management cost and taxes etc.

Does anyone know is this income taxable in USA as I have read that rental income up to $9k is not taxable in USA

dennyk

Like everything dealing with taxes in the US, the answer is "It's complicated..." That is absolutely something you need to discuss with a tax attorney, preferably before taking any action.

I would also consider very carefully before making that sort of investment in general. Being an absentee landlord is challenging even from within the same country; doing so from overseas is even more difficult. If you aren't personally putting eyes on your property on a fairly regular basis, you really have no idea what's going on with it. In addition, buying and maintaining property in that price range poses its own challenges; often properties are that cheap because they need extensive repairs to be habitable, or they are located in very undesirable neighborhoods (and Detroit certainly has its share of literal no-go areas).

Not being around personally to address your tenant's issues or deal with a problem tenant may also lead to difficulties; yes, you can hire a management company to do some of that work for you, but that will significantly cut into your profit margins, and at the end of the day, the management company doesn't really care about your property like you do. If the tenant stops paying rent and then absconds after several months with everything of value they could rip out of your property (including all the copper pipes from the walls), that's no skin off your management company's nose; for them it means they might lose one of the dozens or hundreds of customers they're managing properties for, while for you it means you've basically lost your entire investment. Unless you're getting involved in this endeavor with a local partner in Detroit that you trust absolutely, I'd suggest that you may want to consider alternative investment options. There are ways to add exposure to the US real estate market to your portfolio via investment funds like REITs if you are looking for some diversification, and they are much less risky than putting a large sum into a single low-end rental property in another country.

Benny122

How would get our funds into REIDS Funds investment - do you know anything about them, how it works and the return etc? Much appreciated

We just have funds we want to work better for us and banks don't offer any rates.

It was either investment in Detroit or I was also looking at putting our funds away for 5 years fixed term account in South Africa as the rate is 15zar to euro and their interest rates are 13.53% per year but they wouldnt let us open
An account as we were not citizens which I thought was mad cause you can open accounts here in Ireland in banks for any nationality

dennyk

I am not a financial adviser, and I am not your financial adviser. In my thoroughly unqualified opinion, however, you may want to consider looking at some more traditional investment strategies such as buying shares of mutual funds and/or ETFs before you start considering branching out into more exotic options like directly buying foreign investment properties or investing in potentially questionable foreign banking products.

If you want a good introduction to investing, Bogleheads is a pretty decent resource. Tons of good information on their wiki and in their forum. Although some of it is geared towards Americans, so you'll see stuff about 401(k)s and IRAs and such (no, not that IRA!), the basic principals of investing still apply here. Although you won't be able to open an account at a US brokerage firm like Vanguard, you can invest in many of the same mutual funds they mention in articles like their Three-Fund Portfolio (including Vanguard, Schwab, SPDR, and iShares funds) by buying shares of them as ETFs through an Irish brokerage firm like Degiro.

For a more Irish-specific perspective on investing, you could also check out the Investments forum at AskAboutMoney.com.

As always, though, don't take the word of random Internet neckbeards for granted; if you feel like you need more advice, a consultation with a fee-based financial adviser would be a good idea, especially if you have a decent sum to invest. Just make sure to go with a true independent fee-based adviser, not one who works for a brokerage or investment company and gets paid on commission, and definitely not some adviser your bank offers you; those folks may often be more focused on selling you the funds that make the most commission for them or that their boss is telling them to push rather than what is actually best for your needs.