My daughter has applied for a two year assignment with her company in Sweden, if selected she'll start in Jan or Feb. For the past 5.5 years she's worked at the KC MO world hqs.

She'll keep a driver's license, not sure if it'll be MO or IA (hour home). She will not own property in either state. FWIW< she's single.

I spent four years in Japan 1989-93, but that was as an Army civilian and I paid normal taxes.

We've already asked out tax guy, but I figure SF members can help. Any tax advice?

See this:

IRS 2555

And Pub 54:

Foreign Income Exclusion

Situation is too fact dependent to provide a general answer. Different in every case for different taxpayers.

Having said that, US taxpayers are taxed on "World-wide" income. But, 2555 allows a limited amount of income to be excluded from US tax. She should inquire as to whether her company will provide and pay for tax services from an internationally capable CPA firm (Big 4, generally) for the tax years she will be subjected to these rules. Very often the company's will provide that for expat employees.

Haven't done it myself but know several who have. Usually the company has people dedicated to helping sort out the tax implications. Employee usually comes out well.

She'll be paying income and other taxes at such a high rate in socialist Sweden that there won't be much left to pay on here.
The real question should be, can she keep any of the money she earns over there?
Don't forget about the 25% VAT too.

If she pays taxes in Sweden it will likely cover any/all US income tax liability as their rates are generally higher. (This is how it worked out for me working in Brazil in 2009, though tax laws may have changed.)

quote:

Originally posted by CaptainMike:
If she pays taxes in Sweden it will likely cover any/all US income tax liability as their rates are generally higher. (This is how it worked out for me working in Brazil in 2009, though tax laws may have changed.)

It most certainly has changed. I have a very good friend who's lived and worked in Switzerland as a pastor for the last 35 years. That entire time he was paying Swiss income tax, and was generally exempt from paying U.S. taxes. About 3 years ago that all changed, and the U.S. government started going after all of those abroad. In his case, they hit him for the entirety of his time abroad. After exhausting his meager savings on lawyers trying to fight his case, he eventually lost and was forced to renounce his citizenship, or face extradition.

Moral of the story is to talk to an international tax professional, not just your typical cpa.

Foreign Account Tax Compliance Act

FATCA - Better known as fuck-story for Americans living abroad.

Your daughter should check with the HR department and ask if the company has an expatriate tax program. Most large companies have a program in place. These programs often provide tax prep services for the US and foreign tax returns.

Thanks for all the replies. My daughter works for a major company and I'm confident they will take care of all those issues.

Mrs Sigmund and I were curious, and with me now being retired I have LOTS of time to post on SF.