This is part of the Brains Across Borders series – where I talk about tax problems that pop up when the person doing the work is in one country, and the person getting the work done is in another country. And one of those countries is the United States.

This episode looks at one of the burdens on U.S. employers who hire foreign freelancers, and the interesting problem of how you prove that you don’t have to do anything. It’s stressful to be fairly sure you don’t have to do something, but then that little voice in the back of your head keeps second-guessing you…

It’s Hard for Minors to Expatriate

This week’s question is a semi-frequent topic. U.S. citizen parent wants to renounce citizenship and is curious about a child’s ability to do so.

My child is not 18 yet. Can he renounce his U.S. citizenship?

Quick Answer:

In theory, a minor can renounce U.S. citizenship after age 16 and before age 18.

In practice? I have not seen it happen; we tell people to wait.

How Digital Nomads Can Avoid Paying Social Security Tax

This week’s episode is about Social Security tax and self-employment tax, and it tells U.S. citizens and green card holders living and working outside the United States how to not pay those taxes.

Hacker News and Dynamite Circle people (I participate at both places and get frequent tax-related emails from people active in both of them, so this week’s episode is for you) understand that there are good reasons to form a corporation outside the United States in order to do business. Local laws, banking, and visa considerations are three good reasons. There are a ton of dumb reasons, too.

Consider the following scenario, which is useful for a U.S. person living and working abroad as a freelancer, independent contractor, or self-employed person. You may be a digital nomad, perhaps. But this idea will work for any self-employed person or business owner abroad…

Avoid U.S. Taxpayer Status After Expatriation

This week’s question came from reader O. He asks about expatriates returning to the United States and a way in which an expatriate might become a U.S. taxpayer again–by spending too much time in the United States.

Hi Phil,

I liked your blog post on the Substatial Presence Test : Max 183 days/year or 121 days/year for consecutive years ;-). http://hodgen.com/the-substantial-presence-test-explained/

My question is, is there a different rule for expatriates? It seems that under section 877, those who expatriated between 2004 and 2008 have a 30 day limit per year in the 10 years after expatriation. I don’t see this after 2008, so I assume this restriction no longer applies. Is this also your interpretation?

The Ultimate “RRSP and the IRS” Essay

RRSPs are Canadian retirement accounts. Until late 2014, they were semi-toxic for U.S. tax purposes when owned by U.S. taxpayers who were unaware of the paperwork requirements south of the border. These problems bedevilled countless Canadians living in the United States, as well as U.S. citizens and green card holders living in Canada.

By administrative fiat in late 2014, the U.S. government blew away the problems it had created–problems that cost countless people money and caused high levels of stress.

Income Taxation of a Covered Expatriate’s 401(k) Plan

Online Workshop For Noncovered Expatriates – 16 and 23 January 2015 We are running our patented Online Workshop for Noncovered Expatriates starting this Friday. There are two sessions (January 16 and January 23), each 90 minutes, but last time we did it we ran probably double that length. We stick around until we answer every […]

Covered Expatriates and Their IRAs After Expatriation

This week we look at covered expatriates and IRAs after expatriation. How do IRAs behave after expatriation? How are distributions taxed? What is the strategically best choice–keep your money in the IRA or close it, take the
money, and run?

To keep things relatively short, I am only going to talk about regular IRAs.

Roth IRAs and Covered Expatriates

This week’s question is about Roth IRAs and covered expatriates. It comes from reader R, who said he is a covered expatriate. Lightly edited, his question is:

One of my accounts is a Roth IRA, funded many years ago but now grown to about $40,000. What happens to this? I over 59.5 years old and can withdraw the money tax-free before I expatriate. Might the protection of that end once I expatriate, in which case, should I make tax free withdraw now, before expatriation?

Death as an exit tax avoidance strategy, part 2

This week's episode was written in stages. I started writing this while sitting in Seat 25C on U.S. Airways flight 865 en route to Sint Maarten. I rarely fly U.S. Airways, because the planes are usually well worn. It's like riding a bus. On this flight, two of the three seat trays in row 25 […]

Death as an exit tax avoidance strategy, part 1

This Week This week's question comes from Daniel Hayden, a German tax lawyer I know. He is a fountain of interesting ideas. Hi Phil, Here is another question, that – as far as I remember – has not been covered in your question-of-the-week-emails: Is there any exit tax, if a green card holder, who returned […]