245 | Matt & Megan get International Tax Tips | Dave McKeegan

<p>To watch the video highlights, click on <a href= "https://choosefi.com/245" target="_blank" rel= "noopener">ChooseFI.com/245</a></p> <ul> <li>Matt and Megan are a dual military family on the path to FI. Matt is serving in the UK Royal Navy and Megan is serving in the US Navy, making their tax situation unique.</li> <li>Currently, they plan on having Matt get a green card, allowing him to work in the US, while Megan finishes out her Navy career to earn a pension and then move abroad in about seven years.</li> <li>Once Matt gets his green card, he will be taxed like any other US citizen. He owns an apartment in the UK that he would like to sell. Dave McKeegan notes that since there is no wealth tax in the US, Matt will not be taxed on his assets, but once he gets a green card or meets the substantial presence test, he would potentially have to pay capital gains tax on the sale of the apartment so it would be best to sell it first.</li> <li>Due to the Foreign Account Tax Compliance Act (FATCA), every bank around the world is required to report US citizen account information to the US Treasury Department. US citizens are also required to report accounts on a FinCEN 114 form and assets held overseas are subject to capital gains taxes.</li> <li>Dave wanted Matt and Megan to be aware that mutual funds held outside of the US can often be viewed as passive foreign investment companies. Any investments overseas should be US compliant as well. Vanguard has a number of retirement funds that report correctly to both the US and UK and are exempt from taxes.</li> <li>Matt and Megan are interested in how the can best take advantage of the US tax system and simplify it for themselves. To reduce their taxes, Dave advises Matt to physically give up his green card once they move abroad so that they can place money in international investments under Matt's name and he won't be taxed like he is a US citizen anymore.</li> <li>As long as their assets are less than $2 million, leaving the US will not trigger an exit tax.</li> <li>Depe