One word of warning to DFAs living abroad: you still have to file your tax returns.
But I’m living permanently in another country, you might argue, paying taxes there, just like a good resident should! Doesn’t that exempt me?
This issue has just jumped up and bit a good DFA friend of mine in the arse. The IRS’s answer to her argument: "Foreign country? Exempt you? Hell, no! What are you on, crack?"
The admission that yes, you have been having good craic won’t even raise a smile. This is the IRS we’re talking about! Big trouble, once you step off the plane, back in America.
The silver lining to this: most Average Joe’s won’t actually have to pay anything more. If you’ve been paying taxes to your country of residence and have earned less than a set amount while working there, all the IRS wants to do is hassle some paperwork out of you. When completing this odious task in April 2001, the IRS limit was around $70,000.00. Any Average Joe who earns less than that doesn’t have to cough up another penny.
Which is good. Ireland’s taxation system is enough to give walletcramps to most DFAs. VAT (sales tax) of 20% is automatically included in every transaction. And, there’s only two (flat) tax brackets for income: 20% for income up to £20,000 and 42% for all income above £20,000. (Rich weasels are, of course, given loopholes enough for full tax exemption, just like in the USA) Yep, the Revenue Commissioners (the Irish IRS) take a hefty chunk. All the same, it’s not as bad as it used to be. With the Celtic Tiger economy performing so well, over the last few years, there have been yearly budget surpluses and tax breaks of about 1% a year passed onto we meagre taxpayers.
What does Ireland use its tax money for?
Over here, primary, secondary, and college education is free. (Places in the colleges are granted to students based on final Leaving Cert grades from secondary school.) Medical treatment is free for poor people and subsidised for all. There are also subsidies for housing, for those in need. Water is free for everyone, and so is trash collection. Libraries are free, museums are generally free, and there are large grants to given to the arts and to artists. Something like £800 million is spent every year on foreign aid to developing nations. The bottom line: more facilities and services are administered by the State, in Ireland, than in the US.
- Added to the DFA Guide, April 2002.
Guide Index Red words? Check the Dub Glossary!