Moving to a Different Country? Here are Some Pointers.January 24, 2017
Thinking of moving abroad? Do your homework before packing your bags—is your current insurance accepted abroad? How will your income tax obligations change?
Moving overseas for a job or retirement? There are certain things you should take into account before the big move.
Some things to think about
Jonathan Lachowitz, founder of White Lighthouse Investment Management, a fee-only investment advisory firm specialized in cross-border financial planning and investment management, has an extensive guide on the process of planning a move overseas.
Areas to include in your plan:
- Employment contracts- You need to understand the terms of your employment contract and employee benefits. Certain benefits that may be tax-free in the foreign country may still be taxable to U.S. citizens, lessening their value.
- Family issues- If you’re thinking of starting your family abroad, make sure you read up on the process of obtaining a birth certificate and passport in the country you move to.
- Retirement savings- Planning goes a long way in this area—make sure you fully understand your contribution and distribution options.
- Income tax planning- Be mindful that U.S. citizens are still on the hook to file tax returns and may have to pay U.S. taxes when they live abroad. Download Jonathan’s guide for further advice on this and on timing of income recognition.
- Insurance- By becoming a resident of two countries, you may find it difficult to find a provider whose insurance is accepted in both countries.
- Citizenship and residency- Your income taxes often depend on your residency status—do you owe only on the income earned in your country of residence? Find out in the guide.
- Voting-Your new home may require you to vote through absentee ballot, or at the closest consulate or embassy.
Learn more about how a move abroad affects the areas above, as well as banking and financial services, investments, estate planning, government benefits, and your credit score in “Moving Abroad? Here’s the Checklist” (part one and part two).
Questions? Contact any member of our Global Tax Services Group.