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Expats paying U.S. taxes

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ron916
  10/15/2021 14:45 EST

I am a current CA resident (and future expat) who wanted to his his tax returns and ask a question.

This is to all the Expats in R.P. who chose to keep their US citizenship but continue filing (and paying taxes in the US).

I assume that you have to pay federal but not state taxes? Did your returns get worse from 2019 to 2020 or get better?

Tsmslf
  10/15/2021 18:23 EST

Your assumption is flawed, especially as you are a California taxpayer. Whether you are liable for state taxes depends on the state's laws and some are tougher than others. CA's are among the toughest. You need to read the CA state tax law as to your income and residency for tax purposes. It varies mucho as we say in CA.

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ron916
  10/15/2021 18:26 EST

Yes. My photo is a harsh reminder of how expensive it is getting to live in CA.

So you're saying expats who live in the Phils but maintain their US citizenship must still pay state taxes (I assume from the last state they came from)?

bbazor
  10/15/2021 21:00 EST

ron916: I lived in California before moving here. You do not have to pay California taxes if you live out of the state for x amount of days or months of a given year. I think if you live out of the state for more than half of the year then you don't have to pay (you can Google it to find out the exact amount of time). I do my taxes from here on TurboTax every year. It can be a little painful sometimes, but I have always managed to get through it. I have not paid California tax since I left several years ago.

bbazor
  10/15/2021 21:05 EST

As stated by tmslf, it depends. Here is an article that explains different situations. In my case, I do not have to pay. https://www.greenbacktaxservices.com/blog/expat-tax-ca-state-taxes/

ron916
  10/15/2021 21:16 EST

Thanks bbazor.

Having read your link, I just realized that as a current employee of a local government entity, I will have to pay CA state taxes forever since I will be getting a pension from them.

There's no way to escape that? Isn't that why people move out of CA, to escape paying taxes there?

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bbazor
  10/16/2021 04:40 EST

Sorry to hear that ron916m but at least you know so it can be part of your planning. I am no longer receiving any sort of income from California and have not been there for several years.

tlallen59
  10/16/2021 07:37 EST

Warning to all that collect a pension in the Philippines. I f you change your address to a Philippines address the United States and the RP have a tax treaty that says the RP gets 30%. After I moved there in 2014 my pension was reduced. It didn't take me long to change my address to my nephews in Ohio.

Asawa
  10/16/2021 18:37 EST

The new formulas for W4 withholding that started in tax year 2020 may have also played into that difference. Many folks were overpaying, so the new rules tried to make it more accurate (and ended up erroring on the underside).

I had to compensate for that by withholding an extra amount every paycheck because I moved to the new calculations.

I can't be sure if that applies to you, W4 typically determines whether withholding rates are accurate.

-asawa

bbazor
  10/16/2021 21:32 EST

tfallen59: I am surprised that they are taking 30% of your SS. Do you have a special circumstance? Take a look at this article.Go to the part that covers article 19. https://www.irsstreamlinedprocedures.com/us-philippines-tax-treaty-pension-irs-offshore/

bbazor
  10/16/2021 21:35 EST

tfallen59: Maybe you are referring to a pension other than social security?

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tlallen59
  10/18/2021 16:14 EST

They only take 30% of private pensions not Social security. Mine is a Boeing pension. I am not old enough for social security until December.

s4L
  10/21/2021 15:41 EST

Having lived in Canada, I chose a state that did not have an income tax.

I would look into that CA tax law,

Can California Tax My Pension if I Move out of State?
Thankfully, no. A Federal law (PL 104-95) passed in 1996 supersedes the state’s tax interests and prohibits any state from taxing pension income of non-residents, even if the pension was earned within the state.

source:
https://moskowitzllp.com/californias-exit-tax-explained/

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