CONFUSED! Many people are looking for information regarding US Expat Taxes. Are you a US citizen? Then yes, you do have to file taxes in the US if you live outside of the country. Today we will walk through some of the exemptions you may qualify for when filing your taxes. Many sites tell you that your taxes will be ZERO. We think this is not correct. We want to remind you that we are not tax accountants or lawyers we are just normal retirees sharing our experiences. Your experience may be different. Or maybe you are an accountant and know some of the little details or tips you can offer the group. Please share for the benefit of the group.
We live now on the Island of Madeira in Portugal. Let’s go. It’ll Be fun!
In this video we are walking on Levada do Rei or King’s levada. It is located up in Sao Jorge. The walk is magical. Taking us through part of the laurissilva forest, a UNESCO natural heritage site. Please enjoy.
In case you do not know, the Madeira Islands are in the Atlantic Ocean about 325 miles west of Morocco and 625 SW of Lisbon.
Music by Scott Gorsuch, my little brother.
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My planned income would be my spouses working income, a State Pension, a Passive Income house rental and eventually, Social Security. Sounds like my taxes would get very "Interesting". Hopefully in the US and Portugal some deductions can be put in place. Yes, definitely have to have the tax pros work their magic!
Hi Alan and Leslie, I hope you and your family are well. The Lavada walk looks beautiful, fantastic views. Are you sure the mountain views are real trees and not broccoli??😊
Finally flying to Funchal today for our two week holiday on the island that is one of my favourite places on earth.
Wishing you all good health and happiness. 👍🏿👍🏿👍🏿
Hi Alan. When you said …"filing taxes" and "It'll be Fun"… almost in the same breath, I immediately thought whatever it is you've been drinking, I want some of it! A very important topic indeed but my attention soon drifted to the beautiful scenery along the Levada Do Rei which we completed during our visit in March. Have a great week! Cheers.
The beautiful video softens the blow❤️
Hi Alan and Leslie! Many thoughtful and knowledgeable comments here. My only contribution is as follows: An American Expat should go the steps of becoming a resident in a state that does not tax Social Security and pensions or Capital Gains. And that state would be ones landing base before traveling off into the US to visit friends and family. FLA is just one of the 7 options. To continue to give money every year to IL or NY or any other state so they can utterly squander it is a tragic waste of resources. Also, Foreign Earned Income would be income earned overseas…. such as operating a media company in Portugal. The first $112,000 can be free from the US tax authorities seizing tens of thousands of it for having done absolutely nothing to earn their cut. Lastly, I think if the overseas move has been successful, I might be inclined to Renounce. This can be an emotionally charged issue, and shocked that the US State Dept. isn't going to throw itself at my feet and sobbing uncontrollably as they beg me to stay. Heck, the truth is, no one in government will miss me for a second. Naïve to think they'd care for anything more than all the money they'll miss out on. OH my, that sounds bitter and cynical — much like my first divorce. I've said too much.
Olá! right at the begining of the video, Arco de Sâo Jorge, that's where my late dad as born, my late mum as born in Ponta do Sol, we, "kids" were all born and bread in Funchal.
Thank you so much for this valuable information!
Obrigada Alan and Leslie! This tracks with my research so far. I would stress (but you did mention it) that US retirees need to be mindful that the 2555 form (Foreign Earned Income Exclusion) is for earned income and will not apply to passive income such as Social and Security and pensions. My sense right now as a retiree is once we are registered as NHR it is likely we will pay pretty much what we pay here in the US already. After 10 years, for many US retirees, the taxes will increase dramatically. In our case, I estimate that would more than double. However, with the quality of life issues, lower cost of living, better social services, etc, it is likely going to be worth it.
My new favorite Term: FBar
The turtle tattoo is dope, brother! Looks good, and makes you look younger.
Hey guys another awesome video, question do you fly into funchal airport from the U.S. for madeira island
Thanks
Nice levada 👍🦋
Clear as mud for sure! Thanks and enjoy your week ahead…
Alan, You explained it clearly and slowly, yet it’s complicated. Of course, as a retiree relying on SS, pension, savings and rental income, it’s more complicated. I think accessing a qualified accountant to provide an estimate and overview of tax liability before taking the leap is useful. Also, some may want to consider establishing state residence in another state from their own for tax purposes, as many full-time RVers in the US have done. BTW the music came across as foreboding. Oooooo….
How timely. I just pulled out Excel yesterday to figure out how much in Portuguese tax I would pay after the 10 year NHR program expires. On $24,000 in income I'd pay 24.52%.So a $2,000 monthly income would leave one with $1,510 to spend. I'm most interested in your thoughts on what happens after year 10.
Did you ever consider establishing residency in a U.S. state that does not have a state income tax before moving to Portugal?
Howdy 🤠! Thanks for explaining taxes so simply and clearly!
If one decides to give up US citizenship, would they still be able to get retirement they earned in USA?
If you get the Portuguese citizenship after 5 years I believe, then open a bank account as Portuguese and IRS will not know what you have in that account. The Portuguese living in US if they have proprieties or even money left from their parents they leave there in the banks so they will not pay taxes here. In Portugal is no “death tax” and the estate belongs automatically to the kids equally.
Thank you. Great video! Great camera person!
Hi, I am an American who also moved to Funchal about a year ago with my wife. We would be interested in meeting you.