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Differences between New Zealand and USA - Let's talk taxes. American expats living abroad.
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- เผยแพร่เมื่อ 2 ธ.ค. 2022
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They get it wrong sometimes, turned out I underpaid by $6 last year, they just wrote it off, which was rather nice of them.
NZ governments are just focused on delivering good results to the people.
Yeah right - the current government is definitely not doing this
@@rayc8948 Try living in India or Afghanistan......
I am poor so i get an automatic benefit of $10/week. The IRD puts $520 direct into my bank account at the tax time each year.
@@rayc8948 No government will delivery everyone’s needs all the time, but in NZ we are lucky enough to have governments that try. That is not commonplace, you don’t have to look hard to find govts that work to enrich themselves.
@@rebeccasatherley4727 That may be true, but the elections next year will be the litmus test for whether Kiwis think the current government is acting with the best interests of their citizens in mind ... or not
I’ve long felt that various US federal agencies have never understood that their jurisdiction is supposed to end at their borders.
Beyond their borders, they are just being vindictive. That is how they try to keep their control on as many as possible.
New Zealand and the USA have a double tax agreement (DTA) and with a lot of other countries. Also Tax Information Exchange Agreements (TIEAs) mostly with Tax Havens/
I'm in NZ & under paidby $20 last year . They wrote it off automatically 😊
My US friend is convinced that if she goes home the IRS will take all of her Kiwisaver. I thought maybe she would be taxed on the interest, but she is so stressed and convinced that she will loose her pension. She felt she had to hire an expert in NZ / US taxes last time they were due. It cost her a fortune! I've been an expat and NZ taxes were lemon squeezy, more about how frequently come home.
If I moved to NZ I wouldn't bother keeping US citizenship.
There are some advantages to retaining US citizenship. One of them is that if you go to a non-Western country (other than an enemy like NKorea or Iran), you'll have a much better chance of surviving a ransom or wrongful imprisonment. The US Government is much better at leaning on other countries to release its citizens and find their kidnappers, and has plenty of resources to that end, whereas the NZ Government will just ask nicely and hope that its international prestige and moral authority are compelling, or that an ally like the US will notice and intervene.
@@michaelheliotis5279 new zealand pass port doesn't really attract any attention your not really very valuable and happly sail under the radar
I believe the US Gov. charge several thousand to renounce citizenship, it seems like they put barriers up to stop people leaving.
I always told my kids to travel with a NZ passport if they take duel citizenship in another country.
If one is going to be taken hostage, the Americans and British will be most likely killed first. No one likes them.
Kiwis definitely have a higher survival rate.
I once watched an NZ news programs where a Kiwi foreign correspondent was telling us about his experience when he and his camera crew were taken hostage in the Middle East. They were blindfolded, bound and thrown into the back of a vehicle. As they travelled out of the city, their hostages went through their gear. All of a sudden the vehicle stopped. The kidnappers found their New Zealand passports etc. The van turned around and they were driven back to the city with many apologies; and let go.
Most people don’t have any beef with Kiwis.
@@DomingoDeSantaClara do you have tell them where you are or even renew your passport what a pain in the neck
I know people that have renounced their U.S. citizenship for the very same reasons you have listed. Simply they are not going back to the U.S. too live.
Great advice for Andy Americans lucky enough to get into NZ!!
real easy to start a business in NZ as well. For all its flaws NZ is a great place to have a small business.. I just wish there were less laws regarding personal stuff
Totally agree!
American: "Land of the free"
Also, American: "Tax me an unnecessary large amount of money to not be an American..."
Btw your eyes look gorgeous today
Hi from Florida. Have a Merry Christmas and a Happy New Year. Thanks
Hi Bob - Merry Christmas. I guess we are both enjoying the sun.
Quite a few errors/misdescriptions in there, Tara. The FEIE is not an agreement between the US and other countries. That is an exclusion written into US tax law and applies to EVERY US citizen if they want to claim it when it applies. There are reason to claim it and reasons not to.
What exists between the US and other coutnries are
1. Tax treaties
2. Tax Data exchange treaties
3. Social Security Totalisation treaties
4. Social Security Benefit treaties
New Zealand and the US have agreements in place for #'s 1 and 2 only.
A person *may* want to claim the the Foreign Earned Income Exclusion when their income is within ~US$20k of the EIE cap. But the problem is that if you claim it then you also lose your Social Security contribution calculation amount. If you plan on returning to the US to retire that may be a big factor. If you're not planning on returning to the US then it's a non-event.
If you are in a tax treaty country and you pay more in total tax there than you would in the US then you're better off NOT taking the Exclusion and calculating your US taxes on the whole sum because the tax treaty will give you a credit against US taxes up to 100%, which you already know willm exceed US obligations and therefore result in no payment due, AND (this is the important bit) you will also count as having contributed to US Social Security because your entire salary was included in the Gross Pay Calculation.
Americans living in NZ have to consider the FEIE carefully because it can be a trap later as far as Social Security goes.
11:02 You are NOT (or at least, should not be) taxed double on income over the Exclusion amount. The tax treaty prevents that. You pay the difference between NZ taxes paid and US taxes owed if and only if the US tax due exceeds the NZ tax. So, to put it simplistically for the sake of understanding, if you owe 24% US tax and you've paid 21% NZ tax already then you would only owe the 3% difference to the US. If you owe 21% US tax and have paid 24% NZ tax then you owe the US nothing. It gets more complicated with business returns, but we'll keep it simple for now, eh?
11:50 FACTA. Closer related to FBAR and they overlap a lot. You have to report, as an individual, EVERYTHING that counts as an asset over the value of US$10k. Bank accounts, retirement accounts (KiwiSaver), and investment accounts.
For investments, one comon problem comes when you have employee stock grants in countries other than the US because they count under different circumstances in different countries and that gets messy. Some count them as incomefor tax purposes at award, some at vesting, some at realisation. The average NZ company doesn't do stock grants or options as part of the Comp & Benefits package, but it's becoming more common and it's something NZ companies have NO FVCKING CLUE about as far as taxes go.
Oh wow thanks for clarifying ... this is really helpful
Wow that was an eye opener 😬
Thanks for watching!
OMG, what a nightmare for you!! Kiwis grumble about the IRD but it's good to watch videos like this to appreciate how good we've got it in reality. I was on a pretty healthy salary, and until we bought an investment property, I didn't have to give so much as a single thought to tax. As you say, all automatic. Even with the rental income and expenses to deal with in latter years, it's still quite easy, add up the income and expenses each year and send them to the accountant, he charges a few hundred bucks and job done.
Just panicking at midnight after watching this 😂. Why do I always have to learn things the hard way 😭😭😭😭😭
FACTA also forces NZ financial institutions to report all USA citizens bank information.
Hey Tara, was just thinking about your thoughts on kiwi advertising vs US advertising. My partner often watches NBA and we chuckle at how the US ads are so straight to the point and Kiwi ads are usually read between the lines with storytelling and Humor. Love to hear your thoughts. Especially
Oh man that is soooo true. We watch alot of NBA as well and the commercials are so different. I think kiwi ads lends itself to more creativity.
As someone from nz I didn’t know abt tipping when I went to the USA for a trip - I did not tip at the first place I went 2 and I feel so bad
Why are you suppose to pay taxes in the US if you don’t live there and don’t work there?
If you are a U.S. citizen, you have to pay U.S. taxes. That's why I would renounce my citizenship
It makes no sense. And it's unfair as you're not using any of the usa services ..... totally bizarre and controlling
@@dougs7367 so even if you don't have property or bank accs there, you still gotta pay?
Don't they fund wars around the world they need money for that😉
@@obi4842 yup... they need the money to stop Elon Musk 🤣
Love our tax system. It's even worth hiring an accountant for small businesses. So, do you have to pay tax to the US on income you make here?
Selamat pagi.. Blessed Morning from Marudi Sarawak.
Thank you for explaining about the taxes in Nz Vs USA.
Your very welcome
NZ Inland Revenue Department (IRD) will automatically refund any overpayment, and they calculate that.
Also, the IRD web-page is pretty good too - considering it is a Govt dept.
But any changes that need to be made can be a bother.
Hey Tara, how does SSA entitlements work for retired Americans living in NZ? Will retirees get their benefits when they are eligible in NZ?
I will be potentially coming out to NZ on a skilled migrant worker visa to fill a critical gap in NZ’s healthcare system within the Southland hospital. The opportunity would be in invercargill. Are you familiar with the area? If so, please share your thoughts on the location if you would. Thank you kindly Tara! 😊
I have not personally been there as it is quite remote and the bottom of the South Island. If you are ok with being isolated and in a colder climate than you should be good. Try to rent a house with central heat or you will freeze. The SS question will take a bit longer to discuss. If you are here temporarily you may not want the kiwisaver as that messes with SS. I would talk with my CPA company or the finance company in my training hub.
Sounds like a total government over reach it was easier if I wanted to live in Australia because I'm from New Zealand that I don't have to pay any taxes in New Zealand as long as I'm not earning in New Zealand like Lotto which isn't tax because it's not considered an income . That's why our systems called PAYE pay as you earn.
I like paying tax - within reason. Whenever it gets to me, I remind myself of the many benefits I receive in return for the money I send off to Canberra every fortnight! A TH-camr named Evan Edinger did a hilarious video about the tax situation for USA citizens! If I understood Evan correctly, he said that even people with a parent who had been a citizen and they are not citizens themselves get hit with the rules? (I must surely have misunderstood that?!) Thank you for the video!
I don't remember the video, but Evan was probably making reference to US citizenship by parentage, where someone born on foreign soil to parents who are married US citizens will automatically acquire citizenship so long as at least one of the parents had ever resided in the US. Even though that child might never in their entire life set foot in the US, they're still a citizen and will subject to US tax law. Similarly, a US citizen married to an alien will transmit citizenship to their children born in wedlock within five years of any time they set foot in the US. And yes, this does lead to a peculair situation where someone who was born outside the US and never lived there could transmit US citizenship to their children in wedlock so long as they merely visited the US at some time within five years before the birth. But I mean, I suppose the notion is that you could have potentially inherited property or other interests in the US, so they probably cast the net wide to maximise their ability to reap taxes from it.
@@michaelheliotis5279 I believe that is the scenario.
I don't see the point of a federal tax in the US... as the federal government doesn't do anything good. The NZ govt isn't great either but at least there are safety nets so they are sort of a necessary evil. The American system has no safety nets so there is really no use having a govt there.
The IRS in America sounds scary.
It is
Only a small number of Americans have overseas business interests but it catches out those that are self employed or are married to kiwis that have a business. It is rarely the tax that is the problem it is the cost of compliance ie accountant costs.
Good clarification... agreed
Very interesting but also fairly generic I thought.
I was kind of hoping to get into a real comparison, like do we actually pay considerably more tax in NZ than you would in the US? Especially if you consider federal as well as state taxes, then sales tax vs GST, other taxes like stamp duties, death taxes, inheritance taxes, capital gains taxes etc that we don't have here. Also prize's are taxed in the US apparently? for example if you win a car you have to pay something like 15% of the value in tax?
Having paid taxes in 3 different countries New Zealand certainly has a very easy system for the majority of taxpayers.
Yeah - it is hard to know how deep to go on a topic like this one. I would say there is significantly less tax in NZ overall. The income tax is about the same but your property taxes, sales tax, self-employment taxes and so many others in US make it much higher.
Are there “tax breaks” for being married and having dependents (2 kids)? I’m going to be an expat I’m marrying a NZ man
Yorkshire Peach would find this great to know. Another USA ex-pat living in the UK.
I have investments in the USA and have to fill out tax forms for the IRS even though i am a non-resident alien. It is pretty easy.
Yeah ok. I have spent 40 hours per year doing my taxes and alot of stress
curious....do your kids who have lived in NZ ...do they grow into paying taxes for the US when they get their first jobs?
Yep once they make a certain amount of money
What happens with children, when they grow up in a different country, do they have to pay these taxes? What if they didn't know...
Melanie -
I was thinking about this as well and BrightTax has a tax catch up program when they help you file for years missed because there are many that just don't realise as this is not an advertised thing.
@@Kiwiamericans oh wow! That's a little intense, expecting taxes from everyone born in the country, even if you never grew up there! Thanks for your answer!
Yes all the kids get caught too. Specially if they grow up and have a business. Must relinquish citizenship and its costly to do even that. Solution is never make kids American citizens.
iam a uk duel national i have no tax problems
So glad to hear others don't have our burden :)
Try the Cayman Islands its TAX Free you don’t even pay property taxes…. I have lived on the Caymans for the last 6 years . £113 Million sent over in 2016 after Shutting down all Businesses in the UK where they Charge you Business Rates then 40% Business Tax . Bugger that ….. Set up your companies in TAX Free Countries its easier…I believe i have saved over £18 million pounds in Taxes in the last 6 years..
Wow. Just wow
Hey there, how does being a TH-cam Content Creator earning revenue in New Zealand through your TH-cam channel work? How does this work concerning your Google Accounts and all that complicated stuff, because that's sorta got my mind frazzled 🤣🤣🤣
A clip going through that would be excellent please ☝️😃
Great question! I actually put it on my us taxes but reach out to bright tax as they will know the answer best based on the rest of your income
@Kiwiamericans thanks so much! Really appreciate that, will give them a look 😉
The new $600 earnt through third parties means audit law that was released this year is going to hurt so many Americans
Tell me more!!
@@Kiwiamericans here’s a TH-cam video that explains it better than I can. th-cam.com/video/tuDWDHg4MYo/w-d-xo.html
At the IRS in New Zealsnd of course its low in Taxes, but you pay through the roof in petrol, food and clothing in extra taxes with the (GST) Goods and Services Taxes, for those who don't know.
Still, you can always grow some of your own food and make or buy second-hand clothing, though most of us don't like to do that me including. At least healthcare is free for the most part. If I went back home to NZ, I wouldn't have to pay for any of my medication. Here In Australia, I pay $thousands each year and some aren't on the prescription benefits scheme, so I have to pay full price. For someone with a chronic illness, NZ is the place to be for sure. Petrol hits the pocket for sure though in Oz it's getting expensive to buy as well. This is the problem with the global economy, Putin, and tankers getting stuck in the Suez Canal, plus our continued reliance upon fossil fuel.
The USA you pay through and sky high in private taxes. Like health insurance. Insane health insurance premiums that don't cover anything.
The States also have State taxes.
@@janececelia7448 but it's Joe Biden who caused the petroleum hike prices. We not getting oil from them it's from Saudi Arabia, which by the way do not watch the the Flintstones there but in Abudabi do.
In the U S we also pay taxes on food, fuel, property, autos, most services & some health care, on top of the 18-45% income tax, AND, we are taxes on parts of retirement income.
Oh, forgot the taxes on all goods we purchase.
Wow 😮you pay taxes when you do not receive services. Thats crazy 😢
For a true picture of what can go wrong with certain tax departments in n see the NZ movie based on a book called "We're Here To Help". Its the true story of how they ruined one mans life and how he fought back. He ended up buying the building the Inland Revenue was lodged in and kicked them out.
Yeah do much for "the land of the free" huh
Double tax? What the hell, screw that
WTH? What are you paying taxes on if you move overseas? Granted, if you still own a house or get some form of income in the US then ok, but if you have no assets or income from the US, what are you actually paying for? For being born? That is disgusting, seriously, how can that even be legal?
Yes literally for being born. Literally
I'm a New Zealander living in France in retirement. Tax in France is complicated.
I want work u can help me plz mdm
Its that time Tara...I couldn't keep up with US tax laws...take out NZ Citizenship..👍🏻
Yes Sam - You are right! I am officially able to apply for citizenship here in NZ
@@Kiwiamericans Well come on Tara - why don't you? As far as we're concerned you're one of us now anyway, and your younger children especially have done most of their growing up here as well. Plus, we don't like getting speeding tickets in the mail either!! And you've got years and years left in you yet. Do you want to be still dealing with US taxes when you're 65, 80, 90 years old? Yeah - nah!!
I've looked at some US tax forms and thought "Crikey - how is a normal US citizen supposed to do all that and get it all correct?" - and that wasn't even for an ex-pat, that was just for someone still living in the US. If I were born there I that one look at those tax forms would be enough, all by itself, to make me want to leave the US and become a citizen of almost anywhere else ASAP. :--)
Why is this family holding onto their US citizenship???? Must love complexity
Still working on getting our NZ citizenship
I underpaid (somehow...PAYE) by 290 dollars a couple years ago. NZ government wrote that off. Noice.
This kind of explains the U.S Americans weird obsession with taxes…always talking about other countries and how ‘they pay so much tax for their health care’ and ‘I’m not paying more taxes like those socialist countries’. Sadly the United States is one of the most draconian countries when it comes to taxes … paying, collecting, and spending the money belonging to the citizens.
Wait, Americans have to PAY to not be American ?????
#LandOfTheFee
I know right
How can the USA claim to be a free country when it charges citizens tax when they dont even live in the country...Talk about a rorting!, Are you even earning income in the US?
They're crooks!
“Expat” 😂😂😂 you are an immigrant funny how the titles change
Your Dracula tooth. Please get it seen to.