web analytics
September 16, 2014 / 21 Elul, 5774
At a Glance
Blogs
Sponsored Post
Apartment 758x530 Africa-Israel at the Israel Real Estate Exhibition in New York

Africa Israel Residences, part of the Africa Israel Investments Group led by international businessman Lev Leviev, will present 7 leading projects on the The Israel Real Estate Exhibition in New York on Sep 14-15, 2014.



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, SIFMA, 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


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.

SocialTwist Tell-a-Friend

Current Top Story
Kreshnik Berisha is not Jewish but played for a German soccer team - before joining ISIS.
German Man on Trial for ISIS Membership Played On Jewish Soccer Team
Latest Blogs Stories
Lebanon's Hezbollah terror organization, now fighting in Syria, says the presence of ISIS makes it "clear"  that it must remain to fight the brutal terrorist group.

Countries like Turkey, Europe and even the US have proven fertile ground for recruiting terrorists

Death to All (Zionist) Juice

How many times have you heard anti-semites spew words like Israel are Nazis, or what you are doing to the Arabs is worse that what the Nazis did to the Jews?!…

hacker

My blog, Israpundit, was hacked, and I had to move to a new domain…

timeless torah

There’s much confusion about the definition of Daas Torah; simply put it means the wisdom of Torah.

We’ll never be able to negotiate a true, lasting peace with the Arabs.Their aim is our destruction.

Now I live in a country where every shop in the food court is kosher! I can have anything I want!

Pashkevil: “Come out today and battle the Zionist Amalek and all the traitors in Nahal Haredi…”

Jordan: Only M.E. country with no historical basis and ruled by occupiers placed by European powers.

Why is an IRA a worthwhile account for retirement? And how can you use it to the best advantage?

Like the fighter pilot’s letter, I wonder if certain units are simply too sensitive to allow certain leftwingers to serve in, and to entrust in their hands the security of our country and our lives.

There is only one thing more tragic than experiencing a terror attack, and that is allowing those who attacked you to do it again!

Smuggling Gazans into Europe is cheaper than fighting with Gaza, and then rebuilding all the destruction.

This week’s parsha offers a new covenant; a covenant that speaks to national life unlike any other

Why did I feel so uncomfortable around people with special needs? It’s not like they’re contagious.

The US government ignores Saudi policies, focusing narrowly on Saudi oil and military cooperation.

Imagine if the Arabs would not have attacked Israel in ’48, or any other year…

More Articles from Doug Goldstein, CFP®
Doug Goldstein

Why is an IRA a worthwhile account for retirement? And how can you use it to the best advantage?

Doug Goldstein

How do you reach the top of your profession, and are you always aware of your own talents?

How has the sudden growth in modern technology affected world economy and future employment levels?

Learn about Monte Carlo-not the place but simulator forbuilding a financial plan.

This week’s podcast discusses the need for transparency in international business dealings.

Life after 50? You better believe it! Tips on how to prepare and enjoy life after retirement.

Marriage is not just about emotional fidelity but about financial fidelity as well.

Discussion on recent changes to Social Security benefits and how it will effect you.

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: