web analytics
August 1, 2015 / 16 Av, 5775
At a Glance
Blogs
Sponsored Post


Why It’s Tough to Be an American

Six good reasons why financially, life has become more difficult for American citizens living overseas.
Goldstein 485x300

The American economy isn’t what it once was, and while some Americans are looking to move abroad to better their financial situation, Americans living abroad face specific financial challenges due to the fact that they are American citizens (which I discuss in depth in my new book, The Expatriate’s Guide to Handling Money and Taxes). While holding an American passport once was considered a great advantage, today it has broad ramifications for your finances. Any well-intentioned American parents or grandparents who are thinking of getting American citizenship for their Israeli-born children or grandchildren might want to think again when it comes to taking up this inherited privilege.

Why?

Below are six good reasons why financially, life has become more difficult for American citizens living overseas, regardless of how long they’ve been abroad, whether they’ve ever worked or lived in the States, or even whether they speak English:

(1) FBAR and FATCA. These terms refer to tax reporting requirements that U.S. citizens abroad must file if their assets reach certain minimum levels. Non-compliance can result in steep fines. These requirements have had a very serious effect on how foreign banks and investments view U.S. account holders, since FATCA requires foreign banks to report American accounts and assets to the American government.

The problems that follow are a direct consequence of FBAR and FATCA:

(2) Limits on buying mutual funds through an American brokerage account. You may think it’s O.K. if FATCA makes it difficult to open a foreign investment account, since after all, you can use your American brokerage account and continue with your familiar investments. But, beware: many American mutual funds are rejecting orders to buy if the address on the account is not a U.S. address. And I’ve been approached by clients of other brokerage houses whose mutual fund trades have retroactively been cancelled because of the foreign address issue. Not every brokerage firm in America is comfortable dealing with accounts of Americans living overseas.

There are also challenges in buying mutual funds through an overseas brokerage account. If your foreign investment house sells you a foreign mutual fund, not only will it report your assets to America (or else it risks facing steep taxes), but you may need to report the foreign mutual fund as a PFIC (Passive Foreign Investment Company).

(3) The current situation has made it very hard to transfer assets, as countries don’t automatically recognize notaries from other countries. This means if you live overseas and inherit an American brokerage account, you may need to fly into America to physically have your signature witnessed by an American company that can offer a “medallion guarantee.”

(4) It’s very difficult to get life insurance from a U.S. insurance company because they won’t recognize an address outside the United States.

(5) Say goodbye to your U.S. credit and debit cards. Some of them don’t work away from the United States, while many companies will refuse to mail your statements overseas. And if you have an existing account, now that your address has moved abroad, you won’t receive a new card when it becomes necessary.

(6) Don’t think you can solve your problems by opening a bank account in the United States. Without a U.S. address, forget about it. And if you receive a dollar check, it’s not a simple matter of depositing it in your bank account abroad, as the banks charge a fortune for conversions into local currency, and it’s not unusual to take up to three weeks for foreign checks (yes, outside the U.S. dollar checks are considered ‘foreign’) to clear.

So what are the solutions to these thorny problems?

You’ll find them in my new e-book, The Expatriate’s Guide to Handling Money and Taxes, which I wrote in order to help the many bewildered expats that I meet in my capacity as a financial adviser. As a reader of The Jewish Press, use the coupon code JPRESS to get the book at half price.

About the Author: Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd, a financial planning and investment services firm located in Jerusalem. He specializes in working with clients who live outside of the United States and want to maintain a U.S. brokerage account. Doug’s newest book, co-authored with Susan Polgar, about how using chess strategies to improve your finances, Rich As A King can be purchased at www.richasaking.com. He is a licensed financial professional both in the U.S. and Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. Accounts held at Pershing LLC., Member NYSE/SIPC, a subsidiary of The Bank of New York Mellon Corporation. Neither Profile nor PRG gives tax or legal advice. Before immigrating to Israel, it is advisable to consult with a tax attorney who is knowledgeable about Israeli law. Contact at doug@profile-financial.com

The author's opinion does not necessarily reflect the opinion of The Jewish Press.

If you don't see your comment after publishing it, refresh the page.

Our comments section is intended for meaningful responses and debates in a civilized manner. We ask that you respect the fact that we are a religious Jewish website and avoid inappropriate language at all cost.

If you promote any foreign religions, gods or messiahs, lies about Israel, anti-Semitism, or advocate violence (except against terrorists), your permission to comment may be revoked.

No Responses to “Why It’s Tough to Be an American”

Comments are closed.

Current Top Story
Matt Lee of the Associated Press at the State Department press briefing.
ObameDeal Exposed: It’s not ‘Secret’ from Congress but not in Writing
Latest Blogs Stories
Graffiti found on a building in the village of Duma.

In all the years (and this week it’s exactly 14 years) since our daughter was murdered, we have not found a single Arabic-language post, article, tweet or speech condemning that attack in the center of Jerusalem or the killings.

Inside of the home burned in the Prce Tag attack in the village of Duma.

Everyone is angry at the ongoing Arab terrorism, but what does murdering a baby have to do with protecting Jewish lives or furthering Jewish settlement in the Land of Israel?

Cecil the Lion

Tonight, live Meerkat interactive video tour and talk in Jerusalem.

Free-Jonathan-Pollard-Poster1

The US doesn’t want Pollard & he doesn’t want America- release him with 1 condition: No return to US

Meet Republican US presidential candidate Kerry Bowers & listen to his message to the Israeli public

Amongst the Palestinians (sic) what is promoted and praised for its young people? Terror & martyrdom

“If you can’t negotiate with your enemy, why negotiate at all?” Great sound bite. The press loved it

The phenomenon pushing limits of Orthodoxy to the extreme left has no chance of becoming mainstream

Discussing, what should you do if you are feeling overstressed in your job and are tempted to quit?

Considering Esther Pollard’s group mismanaged his case, Pollard’s chances of parole are slim

Detention Camps for US Jews? Sounds farfetched but it did to Japanese-Americans during WW II as well

We asked the soldiers, what will you tell your children you did during the Disengagement?

The Arab terrorist murderer who murdered Malachi Rosenfeld,(HY”D)last month, was an American citizen

The “Stop Iran” rally was a voice of sanity coming from the American people, and directed at Senator Chuck Schumer who holds the keys…

Shalit Deal advocates: “Israel must do whatever it takes” to free Gilad; This proved deadly nonsense

Learn how modern technology can be used to foster personal development in life as well as in finance

More Articles from Doug Goldstein, CFP®
Doug Goldstein

Meet Republican US presidential candidate Kerry Bowers & listen to his message to the Israeli public

Doug Goldstein

Discussing, what should you do if you are feeling overstressed in your job and are tempted to quit?

Learn how modern technology can be used to foster personal development in life as well as in finance

Tony Stubblebine, founder of Coach.me, shares tips on translating desire for change into action

Talking about the best ways to give financial advice. Is “storytelling” helpful?

How can you get people motivated in the right way? Discover effective techniques right here.

Learn how discipline helps you reach your potential and the role good habits play in being a leader.

Breakthrough adapts insulin to be taken as a pill instead of shot. Can it be applied to other meds?

Printed from: http://www.jewishpress.com/blogs/goldstein-on-gelt/why-its-tough-to-be-an-american/2013/04/04/

Scan this QR code to visit this page online: