16 - American in Switzerland? These Tax & Investment Traps Could Cost You with Arielle Tucker

00:00:04: It couldn't help but wonder,

00:00:06: if

00:00:06: taxes are truly unavoidable why do they always feel like a bad date we never agreed to?

00:00:13: Welcome To Tax and the City.

00:00:15: I'm Julia Tadje from Taxum your personal tax boutique in Zurich.

00:00:20: Here We Talk Taxes Simply And Honestly Sometimes Just You & Me sometimes with guests Always Rooted In Real Life!

00:00:29: And just Like That something mandatory becomes A Little More Delightful.

00:00:39: I couldn't help but wonder, when you cross borders why do your taxes suddenly feel like they multiplied too?

00:00:46: You move for opportunity love adventure maybe a better lifestyle and suddenly you're living in two tax systems that don't speak the same language.

00:00:56: And there's the thing i keep seeing people doing everything right in Switzerland only to accidentally do everything wrong.

00:01:04: Today's episode is about one of the most dangerous assumptions in international tax life for U.S.

00:01:10: taxpayers, that clever planning in one country automatically is clever planing another country too!

00:01:17: My guest today is someone I deeply trust when it comes to exactly this intersection.

00:01:23: Ariel Tucker is a founding partner of Connected Financial Planning host of The Passport To Wealth podcast And one of those rare professionals who truly understands how US tax rules behave once you leave the U.S.. Ariel, I'm so happy your here and welcome to Tax in The City!

00:01:41: Yulia

00:01:41: thankyouso much for having me on this show today... ...and also just highlighting this issue because as u know there are SO many us expats living in Switzerland.... ..and this is a huge issues and i am so happy to get more opportunities to educate those US citizens or US green card or otherwise U.S.-connected individuals living in Switzerland?

00:02:01: Or individuals that don't even know they are connected to the US.

00:02:05: Accidental Americans!

00:02:07: So Ariel, how did you end up working on exactly this field?

00:02:10: Okay it's all a bit selfish because I found myself moving back into Switzerland at my husband was doing his PhD here and he said do That sounds wonderful.

00:02:26: We were living in Boston, I was ready for an adventure and when we showed up in Switzerland i Was kind of trying to figure out my career right?

00:02:34: I'm still in my early twenties.

00:02:35: I didn't really know what I wanted to do When I grew up

00:02:38: And

00:02:38: I had done some tax work during my first year And so it's always interested me.

00:02:44: and I just happened To land in Switzerland in Zurich When FACA was blowing up because all the banks at all the big perfect

00:02:52: timing or

00:02:53: like Oh my gosh, you've seen a ten-forty.

00:02:56: Please come work for

00:02:58: us.".

00:02:58: And I was like okay sounds

00:03:00: good.

00:03:01: so i showed up...I got a job at PWC and ended up in their international tax team.

00:03:09: um and that kind of like it was cracking my knuckles and getting into it right then.

00:03:14: So like you found the perfect niche?

00:03:17: Mm-hmm!

00:03:18: You were here.

00:03:18: perfect moment

00:03:19: yes Perfect

00:03:20: time

00:03:21: yeah It was all about just being at the right place, at the time and then not knowing enough but just saying guests to be opportunity.

00:03:29: So I started in the bottom up as an associate...I was learning how to prepare really complex tax returns because i had been doing volunteer tax work back for low-income individuals.

00:03:40: so I'd seen a ten forty.

00:03:42: But I was more focused on community involvement and helping low income individuals build their communities.

00:03:48: Now I'm helping corporate executives

00:03:50: the

00:03:51: other end of this spectrum, you know with really complex structures and reporting requirements.

00:03:57: And so it was really kind of like learning on-the-ground off in what I discovered being there for a few years.

00:04:05: also moving out to other boutique tax firms is the same questions were coming up over and over again.

00:04:10: yeah as You Know Tax can be so backwards looking.

00:04:13: It's an account Of What Has Already

00:04:15: Happened.

00:04:16: Yes

00:04:16: Not Forward Looking.

00:04:18: If you're only engaging a tax professional to prepare a tax return, they are only looking backwards.

00:04:24: It is not their job to think

00:04:25: forwards.".

00:04:26: And so we had this kind of unique opportunity where we had to think a little bit more strategically because we were working with a lot of corporate engagements where the individuals would be moving overseas or potentially moving back.

00:04:39: So we were thinking out a little better forward-thinking but still oftentimes being hired by company and we weren't hired by individual themselves.

00:04:48: Gosh, why do I owe more taxes?

00:04:50: There was always this gap or almost always the gap between what they would pay.

00:04:56: And then you'd go to their US tax return and it had these giant tax liabilities.

00:05:01: They were all be so mad at me right somehow... Yes life-all!

00:05:04: Yeah i'm just bringing a message.

00:05:06: sorry Do you think that Switzerland is particularly bad in way?

00:05:10: our taxes are relatively low compared other countries.

00:05:16: consult a US person in Germany, for example.

00:05:19: They would potentially not be very mad at you because they are... Would pay so much already in Germany!

00:05:24: They will be mad with German tax authorities but the gap wouldn't that big?

00:05:29: Yeah I think that highlights of really important issue is country to country, we're gonna have different tax laws and they are going to interact differently with the US.

00:05:39: And so Switzerland as you know has lower taxes than the rest of the

00:05:43: U.S.,

00:05:44: We also have a terrible treaty with the u.s.. So other kind factors that aggravating that tax balance for example with the pillar two not being fully recognized the Pillar III contribution is kind of being off-the-table for USXFAB.

00:06:01: All these things aggregate and create this potential larger balance due on the U.S.-side, but that being said I think it creates more an opportunity than its advantage because U. S. citizens will always pay highest of foreign tax liability whether thats German tax liability or in Switzerland, it's US versus Switzerland.

00:06:25: In the

00:06:26: U.S.,

00:06:26: we have a federal tax system and then overlaying that We have a state-taxed system

00:06:30: similar to Swiss systems.

00:06:31: Yes Yeah

00:06:33: But if you've left... If you can show that you fully left The US tax system You cut that State Tax System And so That is an immediate tax savings for you.

00:06:43: So yeah..you might owe more in the u.s Because we had lower on Federal and Cancunal tax rates here in Switzerland but You would probably still have a lower average tax rate than if you move to the UK or Germany, France.

00:06:59: So

00:06:59: at least you've got some good news for your clients?

00:07:01: Yes!

00:07:02: That's what

00:07:02: I try...I try to focus on the global tax-average rather then where are we paying it too?

00:07:09: We're repaying it too.

00:07:09: yeah

00:07:10: Like we get introduced each other by US tax preparer Shout

00:07:17: out

00:07:18: to Hannah Introduce you to me because yes, I do work with a lot of US tax people in Zurich and you don't want them.

00:07:28: And now we worked for each other as well which i really appreciate Because I see a lot in people's tax returns an as you said accidental Americans some of the man not even really aware having anything to do with us but then they might and it is very helpful to have someone that connects dots.

00:07:47: yeah

00:07:48: And I just want to highlight really what my role is.

00:07:51: Yeah, if i'm not a tax repairer...I can legally prepare tax returns-i'm an IRS enrolled agent but Really?

00:07:57: I've kind of more turned into strategic planning.

00:08:00: so really the financial planning aspect Of that and being much more involved in our clients lives than Just The Tax Repair because again To me If you're going for a tax repair, oftentimes that's so backward-looking.

00:08:12: And for me the planning I want to do is kind of understanding what happened in the past and we can use data really plan for future.

00:08:20: This is like at Taksim where they are trying to look as holistic client not only accept documents from last year file but most time i cannot past year, I can try to put it in a good or bad way.

00:08:43: But then we always tried to educate people and at least say listen because of your US tax liabilities investment structure that you chose might not be the right one.

00:08:56: so for future i highly recommend getting in touch with someone like Ariel to cleverly plan been made.

00:09:06: Once it's over, so this is really what we want to do.

00:09:11: if its US people of course need someone on board that advises for the U.S.

00:09:17: side as well.

00:09:18: and if there are people from other countries a lot times when you can point out tax savings... I

00:09:23: know!

00:09:23: It really is like everyone else in the USA?

00:09:26: Yes!

00:09:30: I often tell US people Eighty percent of what I tell any other client because it's just not relevant or even wrong for you.

00:09:40: Which is sad, but again It is what it is.

00:09:42: so let make the best out of it.

00:09:45: Is there like a common thing?

00:09:47: You come across all the time like biggest mistakes.

00:09:51: people Like they think they understand But they actually don't.

00:09:57: So maybe you can tell us some misconceptions.

00:10:02: I would love to!

00:10:03: There's so many things, right?

00:10:05: The first thing is that so many expats or US expats move here for their work and they think it could be very short-term but don't take planning seriously.

00:10:18: And so they're just kind of like, whatever is going to happen.

00:10:21: So we actually have clients come to us all the time where I had over a million Swiss francs sitting in cash and don't know what to do because none What like.

00:10:32: and how do I invest?

00:10:33: How do I build wealth?

00:10:34: because i've woken up.

00:10:35: I've been here for five to seven years And yes, think i'm gonna be here for the next ten.

00:10:39: i don't know where i'm going to retire but i'm Gonna Be Here For A while.

00:10:41: Yes The first thing is just not taking action Is a huge mistake for us expats Because we're leaving out Huge opportunity costs.

00:10:48: right To grow wealth.

00:10:50: Another common issue that i see all the time is around the pillar two in pillar three pension plans, right?

00:10:57: Because these are tax incentivized as you know from a Swiss tax perspective.

00:11:01: Yes I'm talking to thanks for here and so when you're having that water cooler talk with your colleagues With your tax professional even like family members who were not US people Like they're gonna be telling You all the tips and tricks.

00:11:19: But they don't make any sense for US people because they're not recognized.

00:11:23: And what we end up with is kind of like a good intention turning into very costly mistake, and so these aren't recognized from the U.S perspective.

00:11:33: The US views this right?

00:11:35: Because all have to continue being reported back on your U. S tax return.

00:11:38: They view it as taxable foreign brokerage accounts oftentimes full of these punitive PFICs assets.

00:11:47: So really, if you're buying any type of foreign investment fund like... You know?

00:11:52: You're talking to an influencer who specialized experts and they'll go buy this mutual funds or this ETF but their classified is foreign.

00:12:02: and we know that from a U.S perspective because the ICEN number where it's registered is anything about US.

00:12:09: And so this traps people all the time.

00:12:12: I always see these little mistakes end up costing people so much, right?

00:12:17: And Switzerland even like okay let's say you could live with that.

00:12:22: but the thing is if people contribute

00:12:23: U.S.,

00:12:24: people contribute to a pillar three A they do not profit from the tax exemption of this contribution.

00:12:29: But when they want to withdraw their money They have to pay a tax on Switzerland To get them any out.

00:12:35: So they are paying while they have it On the returns or in the gains based on US tax law because its prefix included And then Switzerland taxes them again.

00:12:46: So it is like a double no-no, but yeah I did see that a lot or still do and whenever i said tell the people to immediately get in touch with A US tax person and discuss its hardly ever It's good thing Like Hardly Ever.

00:13:06: Yeah, and again this goes back to the intention is logical.

00:13:10: You want to say for your retirement in a country that you're living in Your country incentivizes This like a country of residence.

00:13:17: it makes sense right?

00:13:20: Unfortunately It doesn't make sense for us people And it's just Again, this is a great example Of how u.s experts are actually really handcuffed financially.

00:13:29: we're like handcuffed walking on a tightrope.

00:13:32: We play by completely different rules and we're really, were not allowed the same opportunities to grow wealth as everyone

00:13:39: else.".

00:13:40: Yeah so it feels logical.

00:13:41: until you find out that you have US tax obligations?

00:13:47: Can you quickly say something about like if you have a green card I mean If You Have A U.S Passport?

00:13:53: probably most people know they still pay us taxes even when I did come across US people that weren't aware of this.

00:14:03: But it doesn't happen too often, does it?

00:14:04: No.

00:14:05: Not anymore!

00:14:07: We're finding... There are over nine million Americans abroad and a lot of Americans still under the assumption because again they're living their lives overseas looking at friends' neighbors And colleagues, and they're only filing tax returns where their living.

00:14:24: Why would you logically think?

00:14:25: You'd have to continue but the US is a completely different ballpark right that tentacles are very long.

00:14:30: so as us citizens an u.s green card holders we to be filing a tax return.

00:14:37: It doesn't mean we're always going to owe anything, but we still have that filing obligation and the thresholds to file are actually quite low.

00:14:45: so if you have like a little mini job or self-employment or anything... Or the worst one is your married person, married to an non U.S.

00:14:52: person?

00:14:53: Yeah And you had five dollars of income even if it's just interest income.

00:14:57: That still triggers a US filing application.

00:15:01: If you have a green card that applies to U.S well, right?

00:15:03: Yeah and You had be very careful with holding the green card.

00:15:07: There is a formal process To actually able go leave The US.

00:15:13: when they are holding A Green Card You have to register your absence And generally you can Have that registered absence for about upto two years.

00:15:21: I mean talk to Your own lawyer.

00:15:22: i'm not a Lawyer But you again Are still tied to the US tax system.

00:15:29: And if you want to end your green card status, there is still a formal procedure to go through.

00:15:36: and one thing that a lot of Green Card holders don't realize the US tax system, we now have to basically go through an exit tax calculation from in how much you're going to owe us for holding that green card.

00:15:58: So many things and people are just like really unaware of all these little gotchas.

00:16:03: And there's so many gotchas.

00:16:05: Another thing I've seen-and i want to point out because were talking about Green Card holders is People think if they just expire it That green card has expired They don't do anything else.

00:16:15: But actually, if you don't go and relinquish your green card again through that formal process...

00:16:20: Okay.

00:16:20: ...who could

00:16:20: end up having no legal right to live in the US but still be on the hook to pay- Oh wow!

00:16:28: Your taxes?

00:16:31: What a lovely system.

00:16:33: It's just yeah You can thank Abraham Lincoln.

00:16:38: Yeah he won't accept it.

00:16:39: The thanks Is there any?

00:16:42: like particular stories?

00:16:43: No names of course.

00:16:46: none of our clients needs to be afraid.

00:16:49: But is there any particular client story that you still remember or an example for what can go wrong and could be avoided if people get proper advice in advance, rather than cleaning up the mess once damage has happened?

00:17:09: Also like a story where had the awareness of, okay maybe there is something I'd rather talk to Ariel and discuss it before.

00:17:20: to avoid costly mistakes.

00:17:22: Yeah,

00:17:23: the first story that comes to the top of my head is because we've already talked about living stuff in cash—we've already talked about The Pillar Two and Pillar Three a little bit–.

00:17:30: I want to highlight another issue which is foreign real estate.

00:17:34: just to clarify anytime i'm saying the word foreign-I know we're sitting in Switzerland but I am saying it from a U.S perspective.

00:17:40: so anything Americans, we just all want to own the land that is underneath our feet.

00:17:49: I don't

00:17:57: know what

00:18:07: it.

00:18:09: We've had clients who either have already owned real estate or are coming to us and looking to buy real estate.

00:18:14: It's just important to understand that the rules of real estate actually operate very differently in Switzerland than they do in US, so we did different incentives tax incentives for owning real estate whether you're renting that real estate or if your using it for personal use, has different rules.

00:18:32: And another thing thats kind of a got-shift with US citizens is as you know in Switzerland we have like mortgages are generally done and these tronches so maybe its an year mortgage right?

00:18:43: In the

00:18:43: U.S.,

00:18:44: We generally have like thirty year mortgage's!

00:18:46: In Switzerland people renew those mortgagings but they also have their mortgags for life.

00:18:51: So again... Different tax systems, different incentives Or how to manage debt between the two systems.

00:18:58: And one of things that's a gotcha on with Frank against the dollar.

00:19:13: So let's say I'm going to use really easy numbers because we have to do math without pen and paper here, yes?

00:19:18: Let us take out a mortgage for hundred thousand.

00:19:22: at that point you are at parity.

00:19:25: one frank is equal to one dollars.

00:19:27: And now here we are twenty-twenty six and the frank is about it's

00:19:31: not quite the same.

00:19:32: Twenty

00:19:32: percent stronger right?

00:19:34: know this because i am transferring money all of time.

00:19:37: And so we go to either renew that mortgage or potentially sell that property.

00:19:42: Yeah, and so we always have to calculate the gain of loss back into US dollars.

00:19:48: Oh wow

00:19:48: it's okay!

00:19:49: So even if we bought that property and hasn't really appreciated much from a stress perspective when you translate purchase price in the FX rate when we purchased it, right?

00:20:02: One to one.

00:20:03: And now we're selling that and let's say the property hasn't appreciated at all.

00:20:06: Right I don't know its way out in mountains.

00:20:08: no-one wants this property still worth a hundred thousand.

00:20:11: but Now When We Do The Calculation...we are saying value of the property is now a hundred twenty thousand

00:20:17: dollars.

00:20:18: yeah so the property has on has appreciated.

00:20:21: So now he potentially have to pay capital gains tax

00:20:25: On those twenty K on

00:20:26: the twenty thousand Dollars even though In Your Pocket

00:20:31: Nothing happened.

00:20:32: Oh, wow.

00:20:33: and so it's just important that you're running these numbers.

00:20:36: You're thinking of these calculations before your making the transaction.

00:20:40: again.

00:20:40: I'm your accountant.

00:20:41: i can only report what has been done.

00:20:44: Yeah So I want to be your planner?

00:20:46: So we can think strategically.

00:20:47: does It really make sense to sell The property right now or one are the other options?

00:20:51: could We convert this to a rental?

00:20:52: Could we do a section called thirty-one exchange something like That?

00:20:55: we want to think about it Really strategically.

00:20:57: if we're looking at A large currency gain on Something

00:21:00: Okay, so not only when Switzerland.

00:21:02: in most cases property prices

00:21:05: go up.

00:21:06: I know really bad and we're gonna buy anything for a hundred

00:21:10: thousand right?

00:21:11: A spot for your car.

00:21:16: But that means it's not only Switzerland but in the realistic example price goes from one hundred to one hundred fifty-thousand francs.

00:21:28: tax you on the fifty thousand property gains.

00:21:31: And then US will say, oh well that's very interesting because now they're one hundred and fifty thousand are I don't know, one hundred eighty?

00:21:38: Yeah!

00:21:39: That comes on top.

00:21:40: Yes...and so- and i think thats a good example..that kind of introduces us into foreign tax credits.

00:21:46: yes So obviously in Switzerland right it is.

00:21:49: uh The longer you hold ,the lower your tax rate is going to be for the property gains tax.

00:21:56: We don't have that same concept on the U.S side, so let's say this was your permanent residence and you're married filing jointly to another American living in Switzerland.

00:22:07: then you've an exclusion of lump sum exclusion a five hundred thousand right?

00:22:11: So maybe it- On that example okay we actually just have to pay Switzerland And we can fully exclude.

00:22:17: But that's only for a primary residence, and that drops down in half if you are single or married filing separately your head of household.

00:22:25: now were looking at only a two hundred fifty thousand dollar exclusion.

00:22:27: That is not a lot.

00:22:29: You bought the Zurich property ten years ago.

00:22:33: It was probably more like one million.

00:22:37: We really have to think through a couple different factors.

00:22:40: but If do pay Swiss tax on this property That's not necessarily a bad thing because we can use that to have some foreign tax credit on the US side.

00:22:51: But again, unfortunately you're always going to pay it at higher rate.

00:22:55: so if the U.S says oh!

00:22:57: That is awesome and tax-free for you great job.

00:22:59: Switzerland might say well... You only live in that property for seven years.

00:23:02: So

00:23:05: what I really wanted point out in this whole topic no one likes paying taxes.

00:23:12: but Even if taxes are due sometimes it might still be worth doing the investment, selling the property because I mean It's very important to calculate after taxes.

00:23:23: Does that make sense or does not?

00:23:25: Because i have seen a lot of people like oh there is taxes!

00:23:29: I'm gonna get my hands on it at all

00:23:32: which Is

00:23:33: Not The Right Decision.

00:23:35: Not always the right decision.

00:23:38: I completely agree.

00:23:39: There're always trade-offs.

00:23:41: Taxes are not a bad thing.

00:23:42: What we want to do is kind of optimize your taxes, but don't be scared to pay taxes because if you go I'm not going to pay any taxes and you do that for twenty years.

00:23:52: You're gonna have pretty big tax bill If you wanna go in liquidate those assets or retirement.

00:23:56: So you have to thinking about it like really smart.

00:23:59: Another planning example that i'll give you that we work with clients a lot like a lot of our clients are working really intense jobs here and they're not thinking i'm gonna be working till age sixty five there like im making bank right now but I am also working twelve to eighteen hours per day.

00:24:13: this is not sustainable, semi-retire or move into more flexible work by the time I'm forty five or fifty.

00:24:23: And so then we might be in like really high income years now where we don't want to make a lot of tax waves, but the moment we switch careers and maybe drop down We're gonna start to be intentionally paying taxes.

00:24:35: because we know we can kind of start to think okay Now we're back into a lower tax bracket.

00:24:40: Let's pay as much as we can at this lower tax brackets Because it just gives us more flexibility depending on which bucket do we need to draw down from?

00:24:50: Yes, so this is quite different from the Swiss tax thinking.

00:24:54: From The Swiss Tax Logics.

00:24:56: and This why it's So important for my perspective For US individuals or us taxpayers To get proper advice.

00:25:05: honestly because yeah I mean there are intelligent people out There And they're not doing anything wrong intentionally.

00:25:13: But just because they don't think about it or the put it off to I'll figure that out later.

00:25:18: Oh, we tell our clients We work with very smart people and i tell them all The time you're very smart And your an amazing thought leader in Your field?

00:25:26: I Just happen To do this All day every day and This is literally all I Do.

00:25:30: yeah so like You go to Go do whatever you do and finance Or software Whatever.

00:25:34: Yeah, oh this Is what I do.

00:25:36: yes

00:25:37: So there's a same here.

00:25:38: Do you agree when once people decide to get external advice and to externalize these problems.

00:25:46: Proper tax advise have proper investment advice taking into account their tax duties that people actually can Physically fail to release.

00:25:56: Yeah, this is what people tell you too.

00:25:58: Oh

00:25:58: absolutely and I think so many people just hire us for peace of mind.

00:26:01: Yes Right?

00:26:02: And I always.

00:26:03: we also do cross-border right.

00:26:05: So all of my clients even if i had two clients who worked at Google We have completely different planning opportunities a lot of times because where they move from Where they want to go Who they're married to there's only the little factors that actually make their case very unique in That kind of cross border planning scenario.

00:26:20: and so I always don't You know My client like I'm a thought partner with you I don't know if i always have the answer off-the top of my head because we do complex stuff.

00:26:29: But, We will figure it out and I Know how to ask The right questions To make sure that you Have the Right information to come up with like a solution.

00:26:37: And I think That's so key in the cross border In the tax space is even just knowing what Questions You need to be asking.

00:26:44: Yes Because again It not always Just obvious

00:26:48: Like you were talking about this water cooler talk.

00:26:51: This Is something point out enough, and this is not only true for US taxpayers.

00:26:57: This it's true a lot of expats and internationals in Switzerland.

00:27:03: they are talking with their neighbour the colleague another mother at kindergarten.

00:27:08: I just came across this ah!

00:27:10: Another mother in kindergarten told me And It was like... It was complete Like off.. It was completely wrong.

00:27:18: Yeah, or chatGPT told me.

00:27:20: It's also a very good advice.

00:27:22: just ask ChatGPt and what might be true for this person?

00:27:28: And it is not necessarily true to you!

00:27:32: They may not tell your full story because they are not aware of all the angles that I involved with their individual solution as well... ...and there can be so expensive.

00:27:42: yeah So please by any means ask someone That actually knows.

00:27:47: Yeah, and I will just kind of go one step further there when you're engaging professionals.

00:27:51: One of my advice to my u.s clients right whether You work with me or not?

00:27:55: When you interview other professionals your colleague may have given you a name Of someone.

00:28:00: make sure you ask do you have other us clients?

00:28:03: Do you understand US tax obligations?

00:28:06: because i find There are a lot of professionals who work With expats And they want expat clients.

00:28:13: Right but They know nothing about US taxes or U.S.

00:28:18: investment considerations, and so they just say yeah I serve expats.

00:28:22: that's really broad.

00:28:23: you don't want someone who just serves expats because we're all tied to the u.s tax system.

00:28:29: those

00:28:29: mistakes can be quite costly.

00:28:32: on your tax return

00:28:34: i have the same impression but it happens more and more than us clients call.

00:28:42: Do you actually work with US clients?

00:28:44: And yes, we do.

00:28:46: You

00:28:47: have people to call right if you get sucked.

00:28:50: that's like... To me That

00:28:54: is the thing.

00:28:59: when I come across something in the Swiss tax return of a us taxpayer raises questions.

00:29:06: i will make sure us ex-expert to make sure I'm not missing out on something and i will then point out that the client is saying we cannot change things for last year, but maybe in future.

00:29:25: Just had a client few weeks ago who has an LLC in US which came across issues with the tax treaty and Social Security Treaty, which do not necessarily say the same thing.

00:29:42: And he wasn't aware so we weren't able to figure it out but I wouldn't say to fix it because in was passed.

00:29:53: So we could just report what was there.

00:29:56: make sure that from now on It's done a different way.

00:30:03: But if you were like had I only asked before.

00:30:09: And he also did that his intention was to do something incredibly good and clever, and turned out He didn't have full picture because he's apparently not working in taxes or social security

00:30:24: Which I mean yeah, and I think also there's this huge misconception that There is treaties And we've already talked a little bit about double taxation.

00:30:31: Unfortunately Americans We kind of always have this risk for potential Double taxation because you have tax timing differences between the Swiss in the US tax system and Treaties are really not written For us citizens.

00:30:46: right if you read through a treaty then You go down to the end of it?

00:30:49: There was savings clause for US citizens, which is basically like nor everything in the street.

00:30:54: if you are a U.S person The u.s still has first rate of taxation and that's like A really hard concept to grasp but other citizens Of different nationalities actually have better rights

00:31:09: Yeah

00:31:09: than us as us people And it sucks.

00:31:13: honestly It

00:31:13: sucks!

00:31:14: Honestly the treaties Are written In way That they're not easily understandable.

00:31:21: You really have to know how to read and interpret the stuff that is in

00:31:27: there.".

00:31:27: Yeah, yeah you also mentioned with LLC-that's another trap that pops up all of time.

00:31:32: we had a total misalignment between How an LLC Is Treated In Switzerland And The

00:31:37: U.S.,

00:31:38: so I'm just gonna put this as flag if your moving too switzerland or coming within LLC make sure you have a ruling on it proactively with your Swiss tax repair, how is Switzerland going to see that?

00:31:53: Yes.

00:31:53: Because this is where the problem starts or when a solution starts.

00:31:58: if you discuss it in advance more like timely... Yeah I think there's so many intersections between your clients and my US clients.

00:32:09: There's gonna be plenty of stuff.

00:32:12: I will make sure to call you and be up-to date on US ideas about taxation.

00:32:22: If ever change... I mean, that's why I love

00:32:24: U.S.,

00:32:24: well it's what stuff changes too.

00:32:26: but the US stuff changes and especially whenever we have a political change you know generally major tax reform.

00:32:32: We

00:32:33: prefer discussing changes for at least forty years then two or three elections abouted maybe changed little tiny things so this is also very different.

00:32:44: So yeah..we are being quite stable with what do i think?

00:32:50: its funny Things that people avoid for a long time, but then finally get them solved.

00:32:59: Give them so much peace of mind and so much relief once they are handled properly.

00:33:06: set up this.

00:33:07: probably very much the same with you.

00:33:12: The US still has, and again I don't want to prepare tax returns.

00:33:15: There's kind of great tax repairs out there but the U S still does have streamline programs that if you're sitting here listening just up to it like oh my god i've never filed a us tax return because they've been filing Swiss ones.

00:33:26: You can so go through these compliance programs To come up-to-date.

00:33:30: So your not sitting with this way Oh my gosh am I complying?

00:33:35: Am I not?

00:33:35: And we get arrested at the airport.

00:33:37: We probably aren't getting arrested You know, I mean people get really scared of

00:33:45: the IRS.

00:33:46: We're in this like weirdly weird time and place with US immigration stuff anyways.

00:33:52: so i'm not trying to be a fear monger or just think if you are thinking about it's weighing on you there is process Yes!

00:33:59: And make sure that your treated properly.

00:34:02: then you won't be arrested.

00:34:03: Exactly Ariel thankyou for bringing clarity and interesting stories, I think very real world perspective because you deal with this all day for coming here.

00:34:20: And if there's one thing I hope listeners can take away today is that cross-water tax life isn't about being clever it's about being aligned.

00:34:31: It's about planning good information proper information not just water cooler or neighbor chat info.

00:34:42: So and all you out there, don't have to navigate this your own and not with chat GPT.

00:34:49: There is people that can help you with that.

00:34:52: And yeah You will find all relevant links in details also of how To get in touch With Ariel In our show notes Just like

00:35:06: That!