As rewarding as it is, expat life comes with significant challenges. Tax obligations and financial reporting requirements create restrictions that can complicate life abroad. Often, expats feel like the unintended victims of IRS crackdowns and anti-fraud legislation. At the same time, their unique lifestyle gives Americans living abroad a distinct perspective on US government, politics, and foreign policy.
Every year, Greenback Expat Tax Services asks thousands of expats around the globe to voice their opinions on everything from taxes to voting to current events. This year, more than 4,000 Americans living in 125 countries shared their thoughts.
The results? After the events of 2020, expats are ready to make their voices heard. While long-stranding frustrations with the US government have led about 25% of expats to consider citizenship renunciation, most plan to send a message to US leaders through the ballot this November. 82 percent of expats said they plan to vote in the 2020 presidential election—nearly 10% more than in 2016. With high voter turnout expected and more than 9 million Americans living abroad, expats stand poised to impact the election in key swing states.
There many possible reasons that more expats have decided to exercise their right to vote this year. Americans living overseas have a history of feeling neglected by the US government and wrongfully overburdened by tax regulation. At the top of their list of concerns, 70 percent of expats feel they should not be required to pay US taxes while living overseas.
One third of expats are required to file additional tax forms—often for an added fee—to meet financial reporting requirements. Some even struggle to find a bank due to the reporting requirements associated with FATCA (Foreign Account Tax Compliance Act). These limitations have serious repercussions for individuals trying to live and work overseas. Although they were originally intended to prevent fraud, these rules can create roadblocks that hinder expats’ abilities to maintain banking relationships, borrow money to buy a home, save for retirement, or run a business overseas.
Overall, about half of expats would like to see the repeal of citizenship-based taxation—the model of taxation that requires US citizens to pay taxes no matter where they live or work. However, many would settle for a simplified filing process or additional tax breaks.
On top of concerns about taxation, 2020 has brought unique challenges. At 81 percent, the majority of expats disapproved of how the US government handed the Coronavirus pandemic. In fact, 63 percent said the US government’s response to the pandemic made them more likely to want to live abroad long term.
Most expats—91 percent—stayed abroad during the crisis. Many of these Americans have permanent homes abroad or preferred to be close to friends and family overseas. However, 27 percent had concerns about safety and civil unrest in the US, and 46 percent felt their host country offered superior healthcare or was handling the crisis better.
The consequence of these issues is that expats do not feel fairly represented in US government. At 89 percent, a record number of expats feel their concerns are less likely to be addressed than Americans living in the US in 2020. That’s compelling motivation for these citizens to make their voices heard by governmental leaders.
US expats are a strong, opinionated group with significant opportunity to impact the 2020 presidential election. Politicians and government leaders have a lot to gain by acknowledging and advocating for expats’ needs and interests. At the same time, it’s critical for companies and non-governmental organizations who serve expats to provide resources for voting abroad, tax requirements, and financial opportunities overseas.
More About Greenback US Expat Tax Services
Greenback Expat Tax Services was founded in 2009 by two expats, David and Carrie McKeegan, to make life better for expats by removing the hassle and anxiety of filing US taxes abroad. Greenback helps expats navigate the complex US tax system with ease so they can focus on enjoying their adventure abroad. Learn more at greenbacktaxservices.com.