More Bureaurcrazy

Wanna know something that sucks big time? As a US Citizen living abroad, not only am I still accountable for annual filing to the IRS, but as a self-employed (or soon to be anyway…or at least I thought) person, I must pay self-employment tax on my entire net income including royalties. This is regardless of the fact that I also will be paying tax in France. This would seemingly put me somewhere around the 30%or higher tax bracket. Cool, eh? Will the wonders of my bureaucratically poisoned life never cease?

I actually have to file taxes in two countries. Why? Because the US is such a “this one here’s trying to be independent and get away with it” screwing *&%@ard! They even have claims on any bank accounts my husband and I jointly own…or any over which I have signing authority. No wonder expats are waiving adios to Uncle Sam and becoming citizens of other countries!

On top of this, supposedly authors living in France are not allowed to have what is called autoentrepreneur status, with a simplified tax scheme and are actually taxed at 45%, paying into the system as if they had an employee. I have yet to confirm this, but so says the link. So 45% in France and 15.3% in the States leaves me with less than half of my income!!! This is insanity!

It is enough to make me scream and literally has…all day long…for two days.

Why can’t I just go about my business? Why is everything so god-damned hard? Why does my government only want to screw their citizens into conformity and slavery while spewing bogus platitudes about liberty and justice and the most laughable of all…free enterprise?

Sometimes, it feels like we just can’t win.

UPDATE:

In continuing my panic-stricken research, I came across the site of CPA, Dan Nelson. He writes:

“An exception to paying social security on your foreign self employment income occurs if you reside in a country which has a social security agreement with the US. In that event you can elect to have your earnings covered by the foreign country’s social security (only if they have a social security agreement with the US), and not have to pay US self employment tax (social security).”

So now, I’m thinking though I’ll still have to file, I won’t have to pay the 15.3% on top of everything else…which is a huge relief…if it is indeed the case. However, I’m still confused. Will I have been in France long enough this year for all this to apply to me?

ANOTHER UPDATE:

I just found an easy to understand PDF offered by GTN.com that explains, in plain English, US Foreign National Taxation.

Obamacare & International Health

I was, as a single person, not all that enthused about Obamacare until I realized that I qualified for free care. Not having had any health insurance for the last 10+ years of my life due to cost, learning that gave it a bit more luster. Now that I’m married, though, I no longer qualify for subsidies and the cost of insurance has gone up 4000%. Bummer. And of course, if I don’t purchase, penalties ensue. Fortunately, Stuart and I have decided to settle where he is now, in France. This will exempt us from having to enroll in Obamacare. Good thing, too, because if we both had to, we’d be talking around $8000 a year. Ridiculous! That money is better spent, in my opinion, on maintaining our good health through whole, healthy foods and alternative care, like bodywork and acupuncture, for well-being. That’s my two cents, but of course, each must come to his or her own conclusions.

Thing is, I’m not in France yet, and we’re not sure when things will be in place for that to happen. So, it seems I will be required to purchase health insurance or face the penalty consequences. Ironically, the penalty is based on AGI (Adjusted Gross Income) of household income. I don’t know anything about anything about any of this, but it sounds to me like the IRS is expecting me to report my nonresident alien spouse’s income to determine my penalty. Excuse me? He has absolutely no obligation to the US government to report his foreign income. He isn’t American! How can they justify penalizing me based on his income??? It’s messed up!

Aside from the tangle of US taxes and Obamacare, one of the things we are currently trying to figure out is whether Stuart can enroll me as his spouse on his insurance in France. We’re waiting for quotes from the insurer. If I need to hold a Cart de Sejour before being allowed to enroll, in other words, be permanently in France, then I will need some kind of international medical insurance in the interim. Fortunately, international insurance plans don’t cost $4000 a year like Obamacare!

I’ve been looking at Cigna Global and HTH among others. Anyone out there have experience with international health plans, good or bad?

Helpful Quick Bits: To File Jointly or Not?

Ah, the joys of a new international marriage and figuring out what to do about our taxes. It’s complicated! Here’s what I’ve learned so far:

  • As a nonresident alien, Stuart does not have to report any income to the IRS. That’s good.
  • Because Stuart and I were married this year, I’ll have to file “married filing separately”, and that means higher taxes. In fact, I’ll lose what would have been a very nice refund. That’s bad.
  • However, we have the option to elect to have Stuart treated as a resident alien for tax purposes and file jointly. That’s good.
  • But if we do that, Stuart will be taxed on his worldwide income until such time as we rescind “the choice” as it is called. And that choice can only be made once in a lifetime. Now might now be the time. That’s bad.
  • That’s because, right now, we’ve decided to settle in France, meaning there’s really no reason to drag Stuart into the US tax system. That’s good.
  • But apparently, I’ll still need to file US Income Tax as well as the infamous FBAR on all bank accounts, even those I share with Stuart. That sucks.
  • And once I establish myself and my microentreprise in France, I’ll have to file taxes in France and the US. That really sucks.
  • Fortunately, there are things like tax treaties, foreign earned income credit, and foreign tax credit. That’s good.
  • And thank God there are financial planners and accountants who specialize in the confusing, complicated web of expat taxation. That’s even better!

(Well…I am TRYING to end on a positive note.)