You clearly haven’t dealt with many of the edge cases then. If you make over $150k as an expat and have a non-American spouse (MFS, as many expats do) you’re looking at roughly $1-$5k in extra taxes that don’t qualify for the Foreign Tax Credit, and since they’re above FEIE, you effectively get double taxed.
You can then take that to the country you reside, IF they have a tax treaty with the US, and apply for a credit which may or may not be accepted.
On top of this, if you’ve worked hard in the US and saved in a Roth IRA (effectively part of the US pension system), any capital gains/dividends accrued are yearly subject to taxation in your country of residence since most tax treaties pre-date the Roth vehicle. Meanwhile, you’re also obligated to pay tax to the national pension system of your country of residence resulting in a double tax, simply because US pensions are mostly private non-governmental savings.
When Europeans move to the US, the IRS doesn’t say “let’s see how much gains you’ve accrued in your national pension fund and tax them yearly.”
If you make over $150k as an expat and have a non-American spouse (MFS, as many expats do) you’re looking at roughly $1-$5k in extra taxes that don’t qualify for the Foreign Tax Credit, and since they’re above FEIE, you effectively get double taxed.
Yes, if you have a bad accountant. If you're getting double-taxed on your global income as an American expat, your tax preparer is committing malpractice and you should immediately find a new one.
When Europeans move to the US, the IRS doesn’t say “let’s see how much gains you’ve accrued in your national pension fund and tax them yearly.”
Because we have tax treaties that address this with over 100 countries (including Protocols (updates to treaties) that address older treaties which were ambiguous on the issue of retirement income).
You can then take that to the country you reside, IF they have a tax treaty with the US, and apply for a credit which may or may not be accepted
This is false. If the treaty applies, you don't get a tax credit...because you aren't being taxed. Conversely, if you are taxed, you will get a tax credit regardless of whether there is a treaty because all major countries have a foreign tax credit regime.
Always humorous to see people who don't know anything about tax opine like they do just because they read a few things on reddit or HN and suddenly decided they were experts.
You have to then take that money paid to the US back to your country of residence and hope that their tax officials have any understanding of the situation, and will apply it as a credit against your tax owed.
News flash: Not all countries tax officials know all the rules either. And going to appeals court over $923.65 doesn't really make sense.
You can then take that to the country you reside, IF they have a tax treaty with the US, and apply for a credit which may or may not be accepted.
On top of this, if you’ve worked hard in the US and saved in a Roth IRA (effectively part of the US pension system), any capital gains/dividends accrued are yearly subject to taxation in your country of residence since most tax treaties pre-date the Roth vehicle. Meanwhile, you’re also obligated to pay tax to the national pension system of your country of residence resulting in a double tax, simply because US pensions are mostly private non-governmental savings.
When Europeans move to the US, the IRS doesn’t say “let’s see how much gains you’ve accrued in your national pension fund and tax them yearly.”