!nostupidquestions is a community dedicated to being helpful and answering each others' questions on various topics.
The rules for posting and commenting, besides the rules defined here for lemmy.world, are as follows:
Rule 1- All posts must be legitimate questions. All post titles must include a question.
All posts must be legitimate questions, and all post titles must include a question. Questions that are joke or trolling questions, memes, song lyrics as title, etc. are not allowed here. See Rule 6 for all exceptions.
Rule 2- Your question subject cannot be illegal or NSFW material.
Your question subject cannot be illegal or NSFW material. You will be warned first, banned second.
Rule 3- Do not seek mental, medical and professional help here.
Do not seek mental, medical and professional help here. Breaking this rule will not get you or your post removed, but it will put you at risk, and possibly in danger.
Rule 4- No self promotion or upvote-farming of any kind.
That's it.
Rule 5- No baiting or sealioning or promoting an agenda.
Questions which, instead of being of an innocuous nature, are specifically intended (based on reports and in the opinion of our crack moderation team) to bait users into ideological wars on charged political topics will be removed and the authors warned - or banned - depending on severity.
Rule 6- Regarding META posts and joke questions.
Provided it is about the community itself, you may post non-question posts using the [META] tag on your post title.
On fridays, you are allowed to post meme and troll questions, on the condition that it's in text format only, and conforms with our other rules. These posts MUST include the [NSQ Friday] tag in their title.
If you post a serious question on friday and are looking only for legitimate answers, then please include the [Serious] tag on your post. Irrelevant replies will then be removed by moderators.
Rule 7- You can't intentionally annoy, mock, or harass other members.
If you intentionally annoy, mock, harass, or discriminate against any individual member, you will be removed.
Likewise, if you are a member, sympathiser or a resemblant of a movement that is known to largely hate, mock, discriminate against, and/or want to take lives of a group of people, and you were provably vocal about your hate, then you will be banned on sight.
Rule 8- All comments should try to stay relevant to their parent content.
Rule 9- Reposts from other platforms are not allowed.
Let everyone have their own content.
Rule 10- Majority of bots aren't allowed to participate here.
Our breathtaking icon was bestowed upon us by @Cevilia!
The greatest banner of all time: by @TheOneWithTheHair!
What sort of things qualify as within the reach of the government to you? I would consider the stock market outside of their reach. Bonds are, of course, very much in their reach. You can buy ETF funds that consist of non-US companies. VXUS comes to mind.
Outside of the immediate reach requires you to open an offshore brokerage account; however thanks to FATCA reporting requirements, most banks don't want to deal with you unless you have significant assets under management.
Back when FATCA was first introduced I was working in private wealth management for a bank in Luxembourg, and we decided to terminate all but 3 accounts held by US citizens, all of whom had assets above 700k USD. I believe 500k was the internally communicated cutoff.
Banks in Switzerland now typically require 1M CHF to open new accounts for anyone who isn't onshore (Swiss citizen or resident), Hong Kong, Singapore and Panama also require minimum amounts between 500k to 1M USD. I think Bahamas, Bermudas, Virgin Islands, Caymans and all the other money islands ask for even higher deposits now.
One thing you could consider are the British channel islands (Jersey and Guernsey in particular), since Brexit they've had a bit of an offshore renaissance. HSBC Jersey for example only requires 100k GBP to open offshore accounts (though I didn't check about FATCA requirements since I'm not a US citizen myself).
If all you want is keep smaller amounts outside of the US, you could look into wise.com, revolut and other money transfer services, they allow you to hold different currencies in physical accounts domiciled in other jurisdictions. Read: If you deposit USD and convert it to GBP, AUD or EUR, those funds will be physically stored in UK, Australia and Belgium respectively. Since wise is a British company (revolut as well btw), the US government at least won't have immediate access.
If there are any online brokers that accept US customers with casual portfolio sizes, no idea.
Crypto of course is also an option, but I don't trust it enough as long term asset storage solution.
Thank you 🙏
This is a very helpful jumping off point for further research
Anytime! You could also check some blogs like nomad capitalist and others, they offer solutions like incorporating a ltd. company in Georgia (the country) or Belize and stuff, but that also comes with a host of other requirements, reporting and otherwise.
Depending on your assets, there are also some countries like Grenada for example that come with a citizenship by investment program, where you get a passport if you invest either into government bonds or buy a property that you must hold for a certain number of years. If you'd be a citizen from there and casually forget to tick the box for US citizenship when opening your Hong Kong account, you might just get away with it. (Strictly not legal, though).
No. Absolutely not.
US citizens are tax slaves. No matter where you live in the world, you owe federal tax to the US government every year. You're required to report all of your assets every year. All of your holdings every year.
In fact, US citizens who have foreign Bank accounts, are required to disclose those bank accounts, and the bank is also required to disclose it to the United states. You will find that there are many banks in the world that will not allow US citizens to open accounts because they simply don't want the paperwork
But wait! There's more! If you renounce your citizenship, for tax purposes, you still owe the next 10 years in taxes to the US Federal government. Even though you are no longer a citizen
I’m personally familiar with the reporting and taxation of foreign banks and even foreign earned income.
Dunno why it didn’t occur to me that it would apply to investment/brokerage account's as well 🤦♂️
Fun fact: you also need to report any money you got illegally on like 8z of your 1040. The government wants a cut of your crime money.
That is always so funny to me. "Hi IRS. I stole $10k worth of goods in 2023, but before I could sell them in 2024 the police confiscated them. Do I count this as a loss for 2024 or...?"
The U.S. Supreme Court in Tellier reiterated that the purpose of the tax code was to tax net income, not punish unlawful behavior.
So...yes kind of.
https://en.wikipedia.org/wiki/Taxation_of_illegal_income_in_the_United_States
Not really. It's a tool to prosecute people who make their living by breaking the law.
... wait ...
AHAHAHAHHAHAHHAHAAHAHHHHA
Not sure what you're getting at, but since you are legally required to pay taxes, and the 5th amendment protects you from self-incrimination, your tax statements are inadmissible in court.
At least being an US citizen is amazing and everyone respects you and wants to be you, right?! .... Right?!!
I mean, better than being stateless and stuck in an airport and no country lets you in... I guess?
I from Krakozhia, I go New York City, now.
Finland, New Zealand, Spain, Japan, Singapore, all seem like strong options.
The best part of being a US citizen is being able to work in the US, everything else is kind of a downer.
If you renounce your citizenship, for tax purposes, you still owe the next 10 years in taxes to the US
Wow! Crazy.
Combine that with the observation that so many of them are trying to avoid taxes LOL
What about income earned in other countries? While living there? Lol
The US taxes it. There is a foreign earned income exclusion for the first $x though.
You owe federal tax on global income, but you can get a tax credit for local taxes paid on that income; So you pay max(US Federal, Foreign Local), but not the sum.
Be a billionaire.
you can avoid paying earned income taxes altogether by living outside of the US for more than 330 days out of the fiscal year.
this is called foreign earned income exclusion.
investment income is different; investment income is not excluded by the FEIE, only earned income, so you wouldn't be able to avoid paying investment income tax to the US unless you immigrated to to another country.
Important note about this (though I don't know how much you earn): you can only exempt up to 120000 dollar equivalent per year, and you must still file your taxes every year with the American government even if you don't live there. Non-US bank accounts and investments also must be declared, even if you no longer live there.
I'm not American myself, but a colleague of mine is and she has mentioned having trouble with American agencies because some of these points (specifically the bank account point if I remember correctly).
Edit: corrections to my info in comment below.
i can clarify and correct those points for you up here as well
the max excluded income is variable, so this year it'll be $126,500. the cap is regulated by the irs and goes up each year.
the FEIE(foreign earned income exclusion) form is form 2555, which you fill out with your regular taxes. it's a very simple couple of pages that you fill in the blanks with the dates you were out of the country and your total earned income for the year, usually takes me fifteen minutes.
the declaration of foreign investment you mentioned is called the FBAR, an online form that takes less than a minute to fill out If you have more than 10,000 invested overseas.
If you have more than 10,000 USD invested overseas, you have to annually declare how much and which financial institutions your savings are in via the FBAR.
as long as you take the 10 to 15 minutes to fill out the FEIE, you won't have any problems with the IRS excluding earned income.
Yeah - I’ve claimed it before. This isn’t really a tax avoidance question though.
It is, in a way. You want a strong 4th amendment, I think.
But there's not much left of it (1), to "make sure everyone pays it's fair share" and later to "keep you safe from terrorists"
Yup. I think you’re right.
I was very confused at the responses I was getting here at first, but after reading them and thinking about things a bit more it does basically come down to taxes even if it isn’t explicitly taxes I was trying to avoid.
TIL
All the perceived privacy, constitution weirdos and early crypto enthousiast advocating for privacy laws start to make more sense when you don't consider your government as a perpetual force of good :)
oh, so what did you mean by "outside the reach of the federal government" rather than tax avoidance, just foreign investment opportunities?
Seizing/freezing.
then all you have to do is file the FBAR and pay your taxes every year and you can invest anywhere you want, however much you want.
Risky, but cryptocurrency. Never a bad idea to diversify a bit but maybe don't put your whole savings there.
As the current us government is very pro crypto, I'd say this is not only very risky, but you would also be buying into their narrative and possibly be an even greater part of it as it crashes and burns.
That said, you're not wrong.
The government is in it for the pump and dump scam (I can't believe those words fit together now and everyone will know what I mean). I suspect they are indifferent or ignorant about other cryptocurrencies.
I would be worried that when the scammers in charge dump their holdings, the resulting turmoil will affect other currencies as well. Demand-based markets don't respond well nor rationally to panic.
That said, I also think the whole thing is a ponzi, and my understanding is of course affected by that. But I believe the logic above would apply in either case.
If your main concern is the US currency or just wanting your money to be out of US-based assets, I believe Interactive Brokers provides a lot of flexibility to move your money between assets and currencies. You're still going to pay taxes and be subject to all US laws.
If your concern is US involvement in your personal financial affairs...good luck. The US has tremendous influence over the global financial system and no legitimate foreign organization is going to work with you unless you have substantial assets. The few countries that do not respect US influence are not particularly trustworthy and trying to do business with them will put you at significant legal risk.
You could also try converting to physical gold, but the US has confiscated gold before, so that's not a sure bet.
Just in case: avoid 'forex trading' and CFDs, especially with MetaTrader and cTrader terminals.
I’ve also wondered this. Want to move and be vocal but scared of this threat.
well, first you would need to set up a brokerage account outside the US, and move your money over to it…
For now, though, you can invest in an Ex-US ETF, Vanguard has one that is essentially the total world stock index minus US companies. https://investor.vanguard.com/investment-products/etfs/profile/veu
Can a US citizen set up a brokerage outside the U.S.? If so, where?
I’m not talking about investing in foreign companies; I’m talking about where I can keep my money (other than “under the mattress”) that the federal government can’t seize/freeze.
Well, they can seize a lot of things because of reciprocal anti-terrorism money laundering agreements with most of the countries you’d want to trust with your money.
resources aimed at wealthy people offshoring their assets might be useful to you
Swiss banhs used to do this, but not anymore. Cayman islands is said to do this but I don't know details. Otherwise russia or north korea might help. nothing where you should trust your money to though.
note that even though you might find a place to do this it is still illegal and it is generally not hard to follow money trails so you ard likely to be caught.