Relocating to Foreign Country

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BogleFan
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Relocating to Foreign Country

Post by BogleFan »

I am relocating to a country outside of USA. I will be moving to a country which is not developed and needs help. I will be devoting a big amount of time in social service (Teaching, nursing etc).

That said, can someone help me understand what is involved in freezing the solicitations, credit card offers etc in mail. I will have moderate access to internet for the rest of my life and can check my credit history online on an yearly basis. But I will be selling my house and I do not want someone to get hold of credit card offers that are send in mail.

I will be moving for the rest of my life and will retire there. So, do you think I should close all my credit cards and bank accounts here?

Also, what about taxes? If I move abroad and the only income I have is in the local currency there, will I still file income tax returns? The country I am moving to has a tax treaty with US so I will not be double taxed. But my question is, even if I do not owe any income taxes, should I file my returns by Apr 15th each year?

I will want to leave my 401k, Roth and 529 here. So, do you see any problems with that? Will Vanguard be ok in putting a foreign address as my primary address?

Your advice is really appriciated

P.S. I am moving in Dec 2008. So, I have good one year to plan things.
ccbwc
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In 2005

Post by ccbwc »

We moved to Paris for six months. This sounds like quite a different situation than yours, but maybe this will be useful. We had the U.S. post office transfer our mail to our new address in Paris (this was free). They only forwarded (mostly) the important stuff. We did not receive credit card offers or catalogues (just first class mail like bills, account statements and personal correspondence). It was a welcome relief.

Regards,
Chip Plumb
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CyberBob
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Post by CyberBob »

BogleFan wrote:...what is involved in freezing the solicitations...
Use the credit-reporting agencies Opt-Out service.
1-888-5-OPT-OUT or http://www.optoutprescreen.com

I did it years ago and haven't gotten a single credit card solicitation since then.

Bob
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BogleFan
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Post by BogleFan »

thanks a lot for that link. I registered there just now.

I also found following useful
http://www.dmaconsumers.org/consumerassistance.html
biasion
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Post by biasion »

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earlyout
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US Citizen?

Post by earlyout »

Living abroad as a U.S. citizen can lead to messy income tax situations. If you are a U.S. citizen, it makes no difference what country you live in. Whether or not you have to file a U.S tax return depends on your income, your filing status, your age, etc. The same rules apply as if you were living in the U.S.

The tax treaty with your new country of residence may provide that you do not pay income taxes to that country or it may give you a foreign tax credit on your US return.

Regarding getting U.S. mail, the best solution may be to contract with an agency to receive your mail in the U.S. and forward it to your new country via DHL or FedEx a few times each month. These agencies will bundle your mail with other mail going to the same location so the costs are not prohibitive. They will hold the mail for you to pick up in your country of residence. This arrangement worked well for me when I lived in an underdeveloped country. I would be very concerned about theft if my U.S. mail were forwarded to me via the underdeveloped country's postal service.

EO
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BogleFan
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Post by BogleFan »

earlyout thanks for your advice. Which company did you use and how much did they charge you aproximately?
earlyout
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Mail Forwarders

Post by earlyout »

I was overseas in the '80s and don't recall the name of the company. My U.S. address was a PO Box in Houston and mail and packages were delivered by DHL to our offices overseas. I think it was in the range of $200 to $300 per year.

The easiest way may be to google "Mail Forwarders country".

EO
grok87
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Re: Relocating to Foreign Country

Post by grok87 »

BogleFan wrote: I will be moving for the rest of my life and will retire there. So, do you think I should close all my credit cards and bank accounts here?

Also, what about taxes? If I move abroad and the only income I have is in the local currency there, will I still file income tax returns?
I would keep one bank account open and one credit card. You may come back to the US from time to time. Or you may eventually decide to return to the US. Even if that is not your current intent, the international political situation may change. If you look back to WWII for example, you will see that many expats had to return home from abroad. Not trying to be alarmist but just pointing out that you never know what might happen- it's best to have a Taleb-like respect for the unknown...

Regarding taxes, as others have pointed out you will need to still file US income tax returns if you have a certain income. It's tempting to let this slide but I wouldn't do it. For example, the US now checks if people are current with their tax returns when you go to renew your passport (for expats that is, not sure if this applies to US residents.)

Good luck!
cheers
grok
Last edited by grok87 on Fri Sep 21, 2007 8:36 pm, edited 1 time in total.
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rob
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Post by rob »

-Here is one of the mail drop places.
- If you are a US citizen then you basically will need to lodge returns. If you have access to the web now and then, then try to use one of the on-line versions (I think Vanguard offer that).
- If you income the foreign income allowance should cover it BUT there was some changes recently, so see a CPA before you leave to get the details right (for now at least).
- I would keep an account with a larger bank that might have non-US branches (Citi bank has some accounts with multiple currencies but depends where you are if that is useful) or something and make everything online. US based accounts are harder to setup once you leave.

Good luck....
| Rob | Its a dangerous business going out your front door. - J.R.R.Tolkien
Gigihsu
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Re: Relocating to Foreign Country

Post by Gigihsu »

BogleFan wrote:I will have moderate access to internet for the rest of my life and can check my credit history online on an yearly basis.
I think you cannot access the free annual credit reports online if your IP addresses are outside the USA. You might be able to login through a virtual private network though. The other problem is I cannot find a non-toll-free number for the credit report agencies. You might not be able to contact the credit bureaus by phone when you are abroad.
CyberBob wrote:Use the credit-reporting agencies Opt-Out service.
I did opt-out the credit card offers years ago. I no longer got the "pre-approved" credit card offers, but I still got a ton of solicitations (just not "pre-approved") from the companies I had business with -- airlines (frequent flyers), schools (my college/graduate school/societies). In short, opting-out might not stop all the junk mails.
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jpsinjpn
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Re: Relocating to Foreign Country

Post by jpsinjpn »

BogleFan wrote:
I will want to leave my 401k, Roth and 529 here. So, do you see any problems with that? Will Vanguard be ok in putting a foreign address as my primary address?
Yes, if you already have an account, you can change the address. You can't open a new account with a foreign address though.

I opened my Vanguard account when I lived in the US and then changed the address when I moved to Japan. When my wife tried to open an account with a Japanese address, Vanguard wouldn't let her so we opened her account with a relative's US address, then immediately changed it to our Japanese address. No problem.
-JP
CaptMidnight
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Re: Relocating to Foreign Country

Post by CaptMidnight »

[quote="BogleFan"
Also, what about taxes?[/quote]

One thing to be careful of is avoiding state income taxes after you have moved abroad. Contrary to common sense, some states, California notoriously, are very aggressive in coming after former residents based on such flimsy grounds as a supposed intent to return. An intent to return can be inferred from continuing to own property in the state, for instance. It would be a good idea to talk to a lawyer who is knowledgeable about such matters in your state on the steps you can take to establish that you are no longer subject to the state income tax. You should probably surrender your driver's license. If you use a mail forwarding service pick one in TX or FL where there is no state income tax.

The good news is that, as an expat, distributions from IRAs and 401ks will be free from state income tax. If you were in a high tax state the difference could matter.
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BogleFan
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Post by BogleFan »

Friends,

All your comments are really helpful. I thank you a lot for these. Will be open for more ideas.

Thanks a zillion.
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Vig Oren
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Post by Vig Oren »

I and family lived ten years in a Middle Eastern country. Our money stayed in a bank here in Boston. I got a special deal on exchanging US dollars at a bank there. Paid only 0.25% for commission. I also kept money in a bank in Zurich, just for emergency b/c a Swiss bank could help you any where and fast. As to taxes, most countries tax by residency while the US by citizenship. Every 6 month I broke my stay there and went out on a trip and then NO tax was due there. Many countries have tax attorneys residing there who are registered both in a US State and at the the foreign country. Such an attorney helped me a lot over there with taxes, and vital documents. For me a real problem was managing my portfolio at the bank here in the US. The time difference was a pain. But overall it was fun. NO MAJOR PROBLEMS.
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