As someone who lived in Italy for years, it is a total hassle to file US taxes, because you need an accountant that gets all this, and most in the US do not.

I agree with her that the system is really bad. We're in the US now, and my Italian wife has none of these hassles: we live in the US and pay taxes in the US and that's that as far as Italy is concerned.

> because you need an accountant that gets all this,

As someone who has been through this, perhaps you can explain why this is.

What makes it so different from US taxes for people living in the US? You definitely do not need an accountant here.

Americans living overseas generally go by a different financial year, for example, in Australia the financial year is July1-June 30. All income and business records need to be made to fit the US financial year. We also have different much more complex forms to fill out and have far more to report than the American citizen living in the US. All our bank details and highest balances must be reported. We also have to file forms with regards to our retirement investments. If you own your own business here it’s literally days of compiling and working out amounts. And if something is wrong, look out. The trust reporting form, 3520, (which most businesses must file) is due before your tax return, and if you don’t realise this it’s a 10k fine. Even for a trust with a balance of $0. Then another 10ks every month you are late after the fine is assessed. (It’s also worth mentioning that the IRS only communicates through snail mail and sends us letters out of some strange places, such as the Czech Republic, and they take 4 months to arrive) meaning you have tens of thousands worth of fines before you even know it. I wish this were a joke or I was exaggerating. For years accountants filed that trust form with tax returns, until the IRS suddenly realised this could be a money maker and quietly introduced the fine. There’s so much more I could write but I have to go to work. I’m just trying to say it’s a never ending nightmare, and in most cases too complex for the average person.

You clearly never owned non-US mutual funds then.

If you don’t make much money, and what money you do make is cash, you spend that cash immediately instead of putting it in your bank account, and you don’t care about retirement, then sure, it’s easy. Dead simple, in fact!

If you’re pretty normal though, it’s impossible to invest in mutual funds and ETFs outside the US unless you want to deal with PFIC filings (you don’t) and if you live in the EU, you’re double screwed, because they won’t let you buy US mutual funds either. And by the way, the accounting algorithm for FATCA is complete nonsense, because you need the highest value of each account over the year, a number that simply doesn’t exist in most banks, so good luck digging that up properly. And if you don’t, $10k fine if they prosecute.

And for retirement, I’m honestly not even sure what to do there, so yeah.

It’s a shitshow, and I’m not sure what your situation was that you didn’t feel like an accountant was useful.

This paper lays it out pretty well. There’s a parallel tax code that is more complicated, and that’s before the nuances of tax treaties factor in.

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3795480

As the name implies, that only applies to Earned Income. Not investment or business income not taken as salary or any other form of income.

> After that the list of countries we have tax treaties with is pretty large

Would need to look at the tax treaties for the specific country.

Not for things like ISA's in the UK

In practice US citizens have it difficult to even open simple bank account. Most foreign companies prefer not to deal with US gov.

Yes! Banks in Germany would flatly say "we can't help you" when I pulled out my US passport. The only one I could get was Number26, which is technically only an online bank account.

N26 is in the headlines for money laundering incompliance. Probably not at all related to average American expats, but as soon as they strengthen their processes they might find it the easiest not to do business with a couple of Americans.

> which is technically only an online bank account.

Which is technically also a normal bank account.

It depends on the country and the financial institution. I'm a permanent resident of another country and had no problem opening an account there(on vacation there the first time no less). Another user here reports a very easy experience opening an account with an institution in the Netherlands.