Expat Advice: Financial Issues in Sterling, Virginia

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What is the name of the city or town that you are reporting on?

Sterling

What sort of challenges or frustrations have you encountered as an investor living overseas? Please describe.

While back in the United States, for less than a year in between overseas assignments, we tried to purchase our first home. We were unable to obtain an owner occupied mortgage because we were not being "permanently" assigned to the United States.

U.S. mutual fund companies usually don't mail prospectuses to overseas addresses. We were able to overcome this in some cases by indicating that we are U.S. citizens (mailing a photo copy of the front section of our passport often helped).

We avoided the standard withholding tax on all U.S. brokerage accounts with foreign addresses, by supplying documents showing we are U.S. citizens paying U.S. taxes.

What advice was particularly helpful to you in managing your finances? What advice would you give? Any other thoughts?

If you are considering an overseas assignment with a U.S. subsidiary, try to negotiate a tax equalization package before you go. If you will be working for a U.S. affiliate abroad consider making your pay subject to U.S. social security taxes either through one of the 18 social security totalization agreements or through section 3121(l) of the Internal Revenue Code again, before you go.

Try to save money while living overseas. If your employer is paying for your housing and possibly other expenses, the temptation is to spend more of you income on other items. Instead, save some of your windfall. You can always spend it later, possibly on big ticket items without having to take on large amounts of debt. Once you repatriate, your salary may remain the same, but you will need to meet housing expenses out of your pocket, which can easily take up a quarter of your income. This is quite a shock for most repatriates. If you have been living on less of your overseas income you will be able to live more comfortably on your U.S. income.

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William Russell

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