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7 money moves for living abroad

Retirement » 7 Money Moves For Living Abroad

Understand your tax responsibilities
Understand your tax responsibilities

If you think moving overseas will free you from paying Uncle Sam, think again. The U.S. requires citizens and green card holders to file returns and pay taxes when residing abroad, even if they also file a return in the host country.

Does this mean you'll be double-taxed? Not necessarily, says Steven Elliott, tax director of Schwartz & Co., an accounting firm in New York. Under the Foreign Earned Income Exclusion, if your foreign earned income is less than $97,600 in 2013 and you meet certain time tests for residency abroad, your income is not subject to U.S. taxes, although you should still file a return. If your income is higher than this amount, foreign housing expenses or taxes paid to your host country may be applied to offset or reduce your U.S. liability.

State taxes may also apply if you're renting or selling your home while abroad, says Elliott.

Given the complexity of these issues -- and stiff penalties for noncompliance -- discuss your situation with a qualified accountant before you go.

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