Thursday, April 17, 2014

Expat Tax Season

Advertisement for a Cinema festival on a railing
Well tax season is winding down here in the US and it's times like these where you really start to question where you choose to live in the world.  I'm not a CPA, but the rule is something like if you spend more than 330 days out of the US in a 12 month period, it's good for some wicked tax breaks.  I even had an accountant apply the expat exemption over a 12 month period that took place during two different calendar years...but like I said, leave it to a professional (the professional might not get it right, but at least you'll have somebody to blame/sue if they get it wrong).

Tax laws are something I intentionally try to know as little about as possible.  The penalties are usually less if they get you for ignorance than conspiracy.  Everybody tells you that you should operate all your businesses at a loss, because actually making profit is the worst possible thing anyone can do.  With an attitude like that, no wonder the US is five hundred gazillion dollars in debt.  I guess the whole thing is just a distraction so that people don't figure out money is worthless.  As for me, I'd rather take it chill, like this guy:
Homeless person sleeping under a bridge
Actually, these days it's a lot less likely to see homeless people in Lima than it was even a decade ago.  Still, there are a couple obvious gathering points.  When I was younger these sights used to fill me with compassion, but I guess I'm getting older and more cynical.  It seems like basically everyone has an excuse to come after you if they want to--sort of like how the police can stop any vehicle on the highway and find some kind of infraction so that they can give a ticket.  Even when you make a sincere effort to do everything on the straight and narrow, all it takes is somebody with an agenda against you and they'll find something wrong.  This is why tax season is so stressful.  The guy in the above picture is probably sleeping on bundles of S/. 200 notes to hide them from the taxman.  There's basically no other way to keep it.

I always used to joke that I'd end up sleeping under a bridge to my students.  Sure, there's plenty that's miserable about such a choice, but I'd hope less people would come gunning for you.  Then again, that might be unavoidable.
I've been giving a lot of thought to returning to Lima lately.  It's obviously more difficult to travel here and there when you have a couple little children.  Still, perhaps I'm just making excuses.  Part of me thinks that my daughters would be better off in one place where they get to achieve an insider perspective and contribute to a community.  However, there's a great appeal to being a traveling outsider and gaining a larger perspective on how the world works (with no attachments).

When I lived in Lima, I always felt more free than I ever did in the US.  It's crazy how America is designed to apply pressure at every minute of the day.  Those of you who have never been to the US can probably see this pressure in the absurd comments Americans make on Facebook groups and in the comments of articles.  Americans are quick to judge, and I think it's because they're constantly being judged themselves.  You always have to be able to justify your actions...which isn't the case in Lima.

Oh, and as far as the Peruvian tax code goes, I've never felt I had an adequate grasp on that either.  People who want to get paid are issued a set of "Recibos de Horarios" and if you aren't paid more than a certain amount per any single recibo, you don't have to pay taxes on it.  At least that's how it was explained to me.

Sigh...tax stuff just always seems shady.

Anyway, to all my friends in Peru, stay chill!  To all my American friends, make sure you send in your tax stuff.  All it takes is a signature and a check...maybe not even a check.

Make sure you read my books if you haven't yet.  "Beyond Birkie Fever" is my most popular work, click on the link and check out the reviews.  Also, I'm involved with this, got something featured here, and I've been wasting a lot of time lurking around here lately.  If you want a free book to review, write me at walterrhein at gmail dot com.  Oh, and read this too.

6 comments:

  1. Welcome back to your blog after such a long absence.?Yes, too bad tax season is back, and it's too bad that I have to have to pay a small fortune to have my taxes prepared by a professional. Why can't they simplify the process so that a moderately intelligent person can prepare his own taxes? And while they're at it why don't they change the tax system altogether and stop subsidizing all of those corporations that make billions and hardly pay any taxes at all?

    As far as Peru is concerned, Lima does indeed appear more prosperous than in the past, but this may be an illusion since massive poverty still exists there, I wonder what will happen when Lima runs out of space and will no longer be able to accommodate the massive influx of people from the rural areas..

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  2. I wonder if Peru or the US is more likely to suffer from a revolution. Weird stuff is happening in the US. It seems like you hear about a massive shooting every day, and half the time children are being targeted. Add in that a family of four has to pay $10,000 a year for health coverage and it's truly a WTF situation. Then again, Peru is going to have a fresh water problem so that might trump everything...

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  3. That's an interesting point that you bring up. In many ways, the USA is indeed a sick society and people in Peru repeatedly have asked me: what induces people to commit such atrocities? I'd say that the answer has something to do with the stress level that people are under here, and certainly paying ten thousand dollars for health insurance annually doesn't help. But really, there's no chance of a political revolution in the USA because most people have bought into the lies told to them by the politicians and are too closely invested in the material advantages that the USA has to offer. In Peru, a political revolution is indeed a very real possibility. Peruvians right now have a false sense of security with the economic boom that it is experiencing . Take that away and shatter the rising expectations of a better life that Peruvians feel and you might have a massive desertion of those who now support the system.which could help spark another uprising like that spearheaded by the Sendero Luminose a while back.

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  4. Dean Charles MarshallMay 6, 2014 at 7:16 AM

    How are you Gentlemen? Been awhile I know, but decided to pay a visit and see what's been happening. Personally I believe both Peru and the US are experiencing a "lull before the storm". In the US growing economic inequality, an insatiable appetite for drugs and alcohol, wanton gun violence, a dysfunctional political establishment and it's system of infrastructure disintegrating so dramatically it's on the verge of collapse, these are all extremely critical issues coalescing together with absolutely nothing being done to address them. It's like watching a train wreck in slow motion. Peru survives because it still has enough natural resources developed nations are willing to pay for and not take by force of arms, but that could all change if "resource wars" become the norm in the 21st century. And of course Peru's facing a fresh water crisis of apocalyptic proportions. At the root of all this "doom and gloom" is money. Globalization has turned the world into a casino for the rich and they're placing bets 24/7. The rest of us are merely peasants or serfs fighting over the table scraps and fearful of our own shadows. With nearing 7 billion people clamoring for the earth's finite resources it's simply a mathematical calculation as to how long mankind will survive as it consumes all the fresh water, arable land and clean air
    out of existence.

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  5. Gentlemen!

    Checking in every so often, glad to see you all are well. :)

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  6. Glad to see that Mr Dean Charles Marshall and Rafael are well. I miss the past interactions that we used to have on this sight. I wonder if those days will ever reappear or will they remain only a fond memory.

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