In one week and two days, I will be in Germany, beginning my new life as an American expat. Even though I thought I'd be more likely to live in the UK, in Finland, Iceland, or even on one of the South Pacific Islands where my research birds are found, I would be lying if I told you that I am not excited to relocate to Germany. I always thought I'd end up living overseas as an expat, even when I was a child.
Despite my excitement about my impending move, I am also extremely stressed out.
I have spent the past couple days trying to find my CITES permit, which was mailed to me last Wednesday, according to my USFWS agent. According to my calculations (and to the post office), this piece of mail should have reached me by Saturday -- at the latest. Voicemails and emails to my USFWS agent have gone unanswered (she is involved with a federal lawsuit, so she is busy, but she is supposed to stay in touch with those of us whom she has been working with). Finally, this evening, I called several offices in Washington DC, hoping to find someone who can help. So far, no one knows anything, so tomorrow, I get to start working on this again. I will start by calling the NYC USFWS officer to find out what I can do since I need to make an appointment with this person next week anyway, so s/he can look over my paperwork to make sure I've got everything, or am working on getting everything I need.
Just to feed my nightmares, I asked what happens if I don't have all the paperwork completed perfectly when reaching Germany. I was told that I am not allowed to leave the customs area at all, which means I will not be able to see or speak to my spouse -- whom I will not have not seen for more than three months. I will be dumped onto the first return flight available (cost: $3000+), my birds are dumped into the cargo hold of the same plane (cost: $230-$1000), and my extra pieces of luggage (collapsible cages for the birds) are also placed on the same plane (cost: $50-$200, depending upon the airlines' weight and volume charges) and we all are flown back to NYC, where I deplane and .. have nowhere to live. This means that I get to book a room in a hotel (which hotel allows an unemployed scientist to stay for 6+ weeks with 5 parrots?). Because my permits are valid for only a few days to a few months (depending upon which one you are talking about), I then get to sort out the mountains of paperwork and I will get to do everything all over again.
I already have decided that if I am sent back to the USA, I will sob loudly on the plane during the entire return trip, just so everyone on the plane feels horrible and decides to petition the USFWS, USDA and the German CITES authorities to send me back to Germany.
But at least Tom the carpenter finished constructing the shipping crate for the birds and it will be delivered this week by FedEx. The crate cost $150 and the shipping costs $15. Even though I am hemorrhaging money all over the place now, I am excited to see it finally.
Ken, the moving company representative, called today too. Until we started speaking on the phone, I didn't realize how lonely and stressed out I had felt these past two days, but after talking with him for a few minutes, I calmed down. We worked on my insurance forms and I opted to underinsure my possessions to avoid high insurance rates. Ken said they rarely lose people's possessions, so this is not as risky as it sounds. Nevertheless, I have already resigned myself to the possibility that my avian veterinary books, which cost me roughly $200-$500 each, might become lost in transit, just because they will be difficult and expensive to replace.
Of course, all these phone calls mean I need to stop slacking off. I need to scrub all my birds' cages, label each piece and disassemble the lories' cages so they can be shipped as flat panels instead of as large and fragile empty boxes. I estimated that each lory cage requires one day to scrub and disassemble into flat panels and I have three of them, so as you can see, I am desperately behind schedule.
I also have been investigating American income taxes .. I learned that the USA is the only country in the world that taxes its citizens regardless of where they live -- even if they live permanently overseas and have a dual citizenship (something I will likely pursue). American expats are taxed on their worldwide income, while resident aliens residing in the USA are only taxed on income earned in this country. (American expats are responsible for paying income taxes to the country where they reside, too, since they are using that country's public and social services). I also learned that it is illegal to give up one's American citizenship in order to avoid paying US income taxes. But how would the IRS know why a person gives up their American citizenship? And further, how is an individual's citizenship decision any of the IRS's business?
Anyway, since I am married to a British citizen and we are living in Germany, the tax laws are looking to be very messy -- for example, am I liable for taxes on our joint income, even if he is the main breadwinner? Do I file a "Married, Filing Separately" tax form to protect his income from the IRS? How does his annual income affect the amount of tax I am liable for? I've read that W passed laws that tax American expats on social services provided by the (foreign) country where they live: is this law still in effect? And what about this year's income taxes? I earned a minimal amount this year, but my spouse, a British citizen who was employed in Finland, obviously had a respectable income all year; am I responsible for paying taxes based on his 2009 income, or am I taxed at his income level? How do I prove I have health insurance so I am not forced to pay the American health insurance penalty?
I am keeping my American Credit Union account, but will have to open a bank account in Germany .. how are those accounts taxed? Will I be taxed on my spouse's bank accounts, even though those are his and consist solely of his earnings from times before we married? Will I be forced to pay the "marriage penalty" on my spouse's 2009 income as well as my own, even though we lived in separate residences in different countries until 20 November 2009? And since I am relocating to Germany, won't I be liable for 2009 income taxes there too, even though I will have been residing there for only five-and-a-half weeks in 2009? How would the German officials know I am living there when a visit can last as long as 90 days (and my possessions will likely arrive in early January 2010)?
I also spent the evening reading about voting as an expat in Germany. Apparently, I am allowed to vote via absentee ballot in presidential and congressional elections, but cannot vote in any other elections or else I will be subject to NY State income taxes -- yikes! I was disappointed to learn that I am not allowed to choose the state where I am registered: I am forced to vote as a resident of the last state I resided in, regardless of my connections to that state. To be honest, I far prefer to vote as a former resident of Seattle, because Washington State is one of the very very few that does not require registered voters to declare an official political party affiliation -- seriously: my political views are no one's business, and I find this requirement to be deeply offensive when registering to vote in NY elections. Considering how large NYC is, I wonder if my vote matters at all? Aren't absentee ballots routinely ignored unless there is a close election?
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Don't stress out, don't "borrow trouble", it's all going to be fine.
Have fun in germany!
Forget about the many things you can find out once you are in Germany. They are of no importance till you are there, such as paying taxes. It is much easier to figure that out by talking to fellow ex-pats who live there than to try to figure it out in NY, where they have only half the idea of the situation.
@grrl scientist
Sorry for mentioning this here, but remember the books which you gave away for free for the first few commenters? It turns out you sent me an e-mail for Big Coal. I sent an e-mail of my address and paid for postage in paypal a few weeks ago, but I recieved no response. So, what is the status on it? I would like to have it before you leave the US. ^_^
Oh, and one last thing. Good luck on your move!
send me your mailing address again, and i'll mail the book to you. things are so chaotic right now that i have stopped giving away books for the moment, but will try to advertize and mail out one last wave of them over the weekend before i donate the remainder to .. somewhere (NYPL? my brother's family?)
Okay, thanks! Again, sorry for the troubles. Looks like you have a mess to deal with. ^_^
With regards to the tax laws, bear in mind that all American tax laws are meant to protect rich businessmen. The first thing you need to look at (AFTER the move is done and you are settled in) are the taxation treaties between Germany and the US. These treaties are meant to avoid double taxation. I'm neither a lawyer nor an accountant, but at a quick glance it looks like German taxes count as credits against American taxes owed. Since Germany probably charges substantially higher taxes, you may not owe additional US taxes. (But, of course, get an accountant familiar with issue to do your taxes, at least the first time. That said, you could probably buy a software package that would do the job as well.)
As for your spouse - I'm guessing that as long as he's not a US resident, I don't think the government has any claim against his income. As for sorting out what's yours versus his - just tell the truth and you should be fine. Quite frankly, the IRS doesn't have the staff to do audits. Act in good faith. If you make a mistake, file an amended tax return.
As for surrendering your US citizenship to avoid paying taxes: (a) it's probably not worth it, and (b) I'm guessing that the burden of proof would be on the IRS. Of course, it may be difficult to acquire British citizenship if you are living in Germany.
If you can manage it, try to start thinking in the language you are living in... It makes it so much easier to not feel isolated...
What Kim said about worrying about stuff that can wait until Germany. Which reminds me - I should contact my medical insurers to warn them about you. And you'll register with the authorities here, so anything before that will not be a problem for the Germans. I'm sure all these problems have been sorted out anyway.
British citizenship is easy, although you'll have to demonstrate that you are knowledgeable about Geoff Boycott's corridor of uncertainty.
Since the move is that close, it's about time to start getting familiar with basic German concepts like Gemütlichkeit, Geschwindigkeitsbeschränkung, Vergangenheitsbewältigung, and FKK. I recommend reading Springtime for Germany by Ben Donald (Little, Brown, 2007). You will end up buying your own Schloss in Sachsen. The Elbe is the new Loire.
Oh, my! So little time, so many things!
I can maybe offer a little insight on the tax situation... My mom is actually a US Tax Preparer (she's been doing this since the early 90's when we lived in Mexico, and even though she now lives in Spain still has many of her old clients -thx to e-mail, FedEx and faxes- as well as new expats residing in Spain) so over the years some of this info has seeped into my brain...
There is definitely a "foreign tax exemption" (or called something like that). Basically the US recognises that first and foremost you have to pay taxes to the country you're residing in. The idea being that you pay the difference to the US. But since most European countries have a higher taxation than the US, I don't think you'll have to worry about paying taxes in the US, but you will have to file a tax declaration. (well, you'll probably have to pay the usual for 2009 since that's where you've been residing most of the year).
There's no reason why your husband should have to pay taxes in the US, he's not a citizen nor a green card holder, right? So my bet would be "married filing separately".
I have no idea what the tax situation is in Germany, but in Belgium and Spain I've only had to file tax returns if I actually earned any money! So you shouldn't have to file anything for 2009 (since you'll be paying for the US), but to be on the safe side you could ask for an appointment with the local taxation bureau to explain the situation and ask for help (that is what they're there for).
Oh, and back the US, double-check this but I believe as an expat you get an automatic extension for the date you have to turn in your tax return to June 15th (and can even have it extended to August 15th if you file for the extension). I remember my mom getting a good laugh at the "tax scene" in Apollo 13 when the guy was worried about not having filed his tax return and they were about to take off... :p
Tax software: my mom uses TurboTax, but from what I gather it's not as simple as it seems... the US is a tax nightmare!
As for voter registration... Are you sure it's the last state where you resided? Because my dad signed the lot of us up after the 2000 debacle and we actually chose which state we wanted... all we had to do was give our last address in that State (we chose Florida, although just before moving to Spain the family had been living in Maryland, 2 years after having lived in Fl). I think my dad also chose Fl under my mom's counsel since Fl doesn't do income tax... ;o) (most US diplomats have PO Boxes in either Fl or Tx as their "official" US address for that same reason).
As for surrendering your US citizenship... it's a lot harder to do than you'd think! You can't just go get UK citizenship and then give them your passport and say "I'm not American anymore". Indeed, after handing in your passport you could straight out to the US Embassy and ask for a new one! To surrender your citizenship (and yes, bad idea... your future kids might find it a very useful thing to have! speaking from personal experience here), you actually need to go several times in front of a US Consul and state that you want to give it up of your own free will (they want to make sure no one is forcing you to do this... they have a hard time conceiving anyone would willingly give up their american citizenship!)
oh, and GOOD LUCK!
And where were you going in Germany again? at least you'll be there in time for the wonderful Christmas markets! I'm going to take advantage of my final month in Belgium (before heading back to Spain) to try and cross over to at least visit the one in Aachen, maybe Koln as well...
I know someone who moved from LA to the UK with her English husband - a close friend of mine - several years ago, and I don't recall her ever complaining about tax problems. I'm sure it'll just be the usual bureaucratic form filling. The biggest problem she had was with her driving licence, as the UK doesn't accept a US one so she had to take our driving tests.
My friends moved back to the USA last year. They, too, have lots of books which were shipped by sea to LA. It wasn't totally uneventful, but they got everything in the end. (Their shipping container got "lost" at one point, but that just meant it had been unloaded from the ship and nobody knew exactly where it was for a few days.)
Moving home is usually reckoned to be one of the most stressful things anyone does, so it's only to be expected that you're feeling a bit fraught. But it'll soon be over and you can look forward to seeing a whole new set of wildlife. Oh: and MrGrrl.
I also have been investigating American income taxes .. I learned that the USA is the only country in the world that taxes its citizens regardless of where they live -- even if they live permanently overseas and have a dual citizenship
Hah, welcome to my world.
I can help with some of this, because I'm a dual US/UK citizen living in the UK and married to a UK citizen.
File "married, filing separately", yes. In addition to the standard form (1040-ES), you want to get Publication 54, possibly Publication 514, and will probably need to file Form 1116.
You will NOT be liable for taxes on his income unless you file a joint return with your husband in the US, something you are under no obligation to do and I strongly recommend against. You need only consider your own income.
Speaking of which, the first $91,400 of foreign-earned income is exempt. The relevant website for figuring out what is and isn't taxable is here: http://www.irs.gov/businesses/small/international/article/0,,id=97130,0… .
There IS an automatic extension for filing until June 15, you can get an extension until October 15, and if you are residing in a country with national healthcare you are automatically assumed to be covered by health insurance (or at least so I've been told). The main IRS website to work from is http://www.irs.gov/businesses/small/international/article/0,,id=97324,0… .
You can maintain a bank account in the US without worrying about it, if you have interest-earning accounts there the bank will deduct the necessary taxes automatically.
If you have ever been a registered voter in the US, then registering as a voter abroad will be through the state AND COUNTY where you were last registered. You only get to choose where you register if you are a US citizen born abroad who has never registered to vote in the US before.
Getting British or EU citizenship does involve wading through squadges of paperwork and I'd say would take a minimum of a year; they will probably insist that you be married to your husband and resident in the EU for a minimum time before they consider it. Don't plan on giving up your US citizenship any time soon...or to be honest, needing to. It's more sane than you think.
Speaking of money, though, I can see that you still haven't cashed the $5 check I sent for the book you sent me. At this I think I better say "forgetaboutit" and give you the money (+a little extra to cover the PayPal fee) into PayPal.
GOOD LUCK with those CITES papers....perhaps the relevant officials would accept faxes, if you can't get the originals in time?
One more tax thing...
You can choose between: 1. Exempting up to 91,400 of all foreign earned income from US taxes (anything over will be taxed) or 2. pay US tax on all income foreign and US, but take a credit for the taxes paid to Germany on German income.
The first choice is almost always better, but, you can only take that once you have lived abroad as your principle residence for 365 days, including one full tax year. (Form 2555EZ) On the other hand, it can be applied retroactively.
So in your first year abroad, if you have both US and German income, file for an extension or plan to amend 2009 taxes in 2010 to get the exemption claim, and get back any money had you met the residence test in 2009.
Taking choice 2 cannot be undone later, I think.
Good luck!
Wow...I am SO jealous. Good for you! You'll love it there, I'm sure. Good luck!