Regulations governing driver’s licenses are a recurring problem
for Americans abroad.
DRIVING
---Germany
U.S. citizens must acquire a German driver's license
within six months of residing in Germany in order to drive legally. So far, 20
U.S. states have complete reciprocity with Germany: Alabama, Arizona, Arkansas,
Colorado, Delaware, Illinois, Kansas, Kentucky, Louisiana, Massachusetts,
Michigan, New Mexico, Pennsylvania, South Carolina, South Dakota, Utah (the very
first to allow reciprocity), Virginia, Wisconsin, Wyoming, and Puerto Rico. Ten
more states have partial reciprocity, requiring only the written test:
Connecticut, District of Columbia, Florida, Idaho, Michigan, Missouri, Nebraska,
North Carolina, Oregon and Tennessee). Note that highly populated states such as
New York, California, Ohio and Texas are not on this list.
---France
After the first year of residency, you MUST have a French
license to continue driving. Currently, Canadian licenses from Quebec,
Saskatchewan, and Newfoundland can be exchanged. There are ten states in the
United States that have reciprocal agreements. They are: Connecticut, Colorado,
Illinois, Kentucky, Kansas, Michigan, Florida, South Carolina, New Hampshire,
and Pennsylvania.
---Japan
Anyone staying in Japan for more than 12 months must
obtain a Japanese Drivers License. It is a difficult, time-consuming process for
most Expats to obtain their Japanese driving license. If one has an Australian,
New Zealand, British, Swiss, or German driving license only some steps of the
process are required. On the other hand, Americans and Canadians are required to
complete the entire process.
---UK
You may drive vehicles up to 3.5 tons and with up to
eight passenger seats, provided your full license or driving permit remains
valid for up to 12 months from the date of coming to UK. If you hold a
driving license from a designated country you may apply to exchange this for a
British one up to five years after becoming a resident. Great Britain has
reciprocal exchange agreements with Gibraltar and 15 designated countries. The
designated countries are: Australia, Barbados, British Virgin Islands, Canada,
Falkland Islands, Faroe Islands*, Hong Kong, Japan, Monaco, New Zealand,
Republic of Korea*, Singapore, South Africa, Switzerland and Zimbabwe.
---Netherland
If you are from
an EU country, Iceland, Liechtenstein, Norway or Switzerland, then your
driving license is valid in the Netherlands for another ten years. Driving
licenses from all other countries are valid for only six months. This also
applies if you obtained your driving license in the Netherlands Antilles or
Aruba. More on the Netherland >>
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Reporting Foreign Bank Accounts
---Every US citizen or resident alien, partnership, corporation, estate, or
trust must file TD Form 90-22.1 [ Treasury
Department Form 90-22.1 (PDF, 4 pages)] if they have "financial
interest in or signature authority, or other authority over any financial
accounts, including bank, securities, or other types of financial accounts
in a foreign country, if the aggregate value of these financial accounts
exceeds $10,000 at any time during the calendar year."
The $10,000 threshold is for your aggregate account balances. In other
words, your total across all your foreign accounts.
---Foreign pension accounts may not have to be reported on the foreign bank
account report. You only need to report those bank accounts which you own or
have an interest in. Pension accounts that are owned and controlled by your
employer or by a foreign government are not owned by you. While you hope to
utilize those funds in the future, you have no control over those assets,
and they do not count towards your $10,000 limit. However, retirement
savings accounts which you own and control, such as accounts similar to
individual retirement accounts, annuities, and 401k-type plans would need to
be reported. Treasury Form 90-22.1 is due June 30th of each year to report
foreign bank accounts owned in the previous year. Do not mail TD F
90-22.1 with your tax return, and do not mail the form to the IRS.
Mail your completed and signed TD F 90-22.1 to the Treasury Department at
the following address:
Department of the Treasury
Post Office Box 32621
Detroit, MI 48232-0621
Alternatively, you may hand-deliver TD F 90-22.1 to any local office of the
Internal Revenue Service, and they will forward the form to the Department
of the Treasury.
---Military banks are considered US banks. You also do not need to report
US-based accounts held by a branch or division of a foreign bank.
---The law requiring US citizens and resident aliens to report their foreign
bank accounts is found at 31 CFR 103, Section 103.24.
International Taxpayer Info
---American taxpayers working abroad can deduct some housing expenses, a
benefit that has helped attract American executives to jobs in high-cost
European capitals such as London or Paris. But under the new system, this
tax exemption on housing will be capped at $11,536, although in some cases
the Internal Revenue Service could adjust it based on geographic differences
in the cost of living.
--- United
States Income Tax Treaties - A to Z
Read more >>
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INCOME TAX
U.S. Permanent Residents (green card
holders) as well as U.S. Citizens must report each year their income earned
anywhere in the world. That means your U.S. income tax return must include:
Foreign dividends / Rental Income Earned Abroad / Foreign pension income /
Foreign capital gains or losses on stocks, bonds, real estate / Foreign
royalties / All other foreign income.
Do not assume just because you moved
out of the U.S. that your previous state of residence has no claim on taxing
your income. Many states such as California, Virginia, New Mexico and South
Carolina make it very difficult to give up your "tax domicile" in the state and
require that you file state income tax returns (and pay the tax) even if you do
not move back until years later. Some of the criteria that a state looks at to
determine if you are a resident for state income tax purposes includes your
driver license, if you register to vote there, if you maintain an address there,
the location of your bank accounts, if you own or rent real property there, the
license plates on your cars, and if you still receive utility bills in that
state.
The US has income tax treaties with
over 35 countries. Both the Internal Revenue Service and taxing authorities in
foreign countries use these treaties regularly to exchange information on their
residents living overseas.
To claim the foreign earned income exclusion, the foreign housing exclusion, or
the foreign housing deduction, you must have foreign earned income, your tax
home must be in a foreign country, and you must be one of the following:
* A U.S. citizen who is a bona fide resident of a foreign country or countries
for an uninterrupted period that includes an entire tax year
* A U.S. resident alien who is a citizen or national of a country with which the
United States has an income tax treaty in effect and who is a bona fide resident
of a foreign country or countries for an uninterrupted period that includes an
entire tax year, or
* A U.S. citizen or a U.S. resident alien who is physically present in a foreign
country or countries for at least 330 full days during any period of 12
consecutive months.
The following expenses qualify for the
foreign housing exclusion:
---Rent, Fair rental value of housing provided by your employer, Repairs,
Utilities other than telephone, Real property and personal property insurance
(homeowners & renters insurance), Occupancy taxes, Nonrefundable security
deposits or lease payments, Furniture rental, Residential parking fees.
Additionally, you may be eligible to exclude housing amounts paid by your
employer.
---Tax equalization payments paid by your employer, Education expenses for your
dependent children.
Read more >>
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