Taxes are done and on the knitting front...

Our French tax declaration is due on June 11. It's all done on line, with most of the lines, for most people pre-filled. All you have to do is check they are correct and modify if they are not. We have non-pension, non-salary income that we have to enter manually. The instructions are pretty clear and almost everything get automatically updated in the main form. Except, not everything. And that's where I had a problem, which I think I managed to correct. There's a zone at the end of the procedure to write a note and or questions, so I wanted to detail what I did, what information I couldn't get on to the form, and the fact that I am an Americans and the treaty allows.....
The directions on the text zone specify that one should not copy/paste. You have to type out everything and I had a lot to type. It wouldn't accept it. The message said no special characters and no tabs, so I got rid of the tabs and the € sign and typed in EUR. No go. I took out the =, the ( and ), and even the -. Still no go. I kept making the whole thing less and less legible in French. Still no go.
In the end I deleted my text and wrote that I was sending an email with the details. Even that got rejected until I switched all accented letters for unaccented ones and removed the apostrophe in "J'ai".
I can't imagine how the French administration created a site that refuses to accept standard French punctuation.
At the end of procedure, once the declaration is submitted, there's a prompt to do a survey and make a remark. I did. Then, I sent the email with all the details I couldn't put into the online form. But it's done.
And my US tax declaration went off last month. I have to have all the French info, which is sent to us or put on line in May, in order to prepare the US taxes.

Taxes are done!

I have made my first yoke sweater on the knitting machine. Usually a yoke is made on circular needles in one piece. On a knitting machine, it's in two pieces. Fortunately, the pattern I was using (by Irene Woods, in the Facebook group Machine Knitting Round Yokes) is calculated so that the seam joins are not noticeable. 

I used left over self-striping sock yarn for the fair-isle pattern, making sure that I started each piece at the same point of the pattern repeat. I really like the effect. 

I love this blue merino yarn from Yeoman's. It's for next winter for S. I hope it's not too big, then. I'm sure it's too big now. It'll look great with his eyes!

In May, I made a sweater for C, 15. (There are too many names in the family that begin with C and Ch!) It's a lovely cotton/acrylic blend in a nice shade of green. It did require hand manipulation on the front and sleeves for the lace and lines of purl stitches. I sent it off to her along with all the things we had in stock to take to the UK on our cancelled March trip.
The work on the bathroom is almost finished -- yes it has taken 3 weeks, so far! There's still some finishing touches -- like sealing the bathtub, hooking up the sink and sealing. And the toilet we ordered is now delayed until mid-August!
France started de-confinement on May 11. The second phase started on June 2. We are no longer restricted to a 100 km radius from home. Restaurants in the green zones (everything except the Paris area for mainland France) could reopen and so on. Restaurants in Paris could serve outside. There are strict distance rules, but whereas some countries recommend being 2 meters (6 ft) apart, in France, it's 1 meter. I've had my hair cut and I've been to some delayed medical appointments in the neighborhood. Other than that, though, I still haven't gone out much. Tomorrow, though, I have an appointment in Paris. Of course, I'll be masked up. In the neighborhood, though, there's no point in putting on a mask until I get to the boulevard. People are just not out.
I would have gone to Paris, yesterday, for the sit-in that was planned near/in front of the US embassy, but the organizers did not get the permit. I imagine there are plenty of reasons for that, but the one mentioned in the news report I read, was that outdoor crowds of more than 5000 were currently not allowed because of Covid-19. I'm pretty sure that the location was also a factor. I don't know if it went ahead, anyway. There was an unauthorized demonstration earlier in the week about a French case of police brutality and racism. It's not an exclusively American problem. I am wary of unauthorized manifs (demonstrations) because there's more risk of them being infiltrated by troublemakers. Look what happened to the Gilets Jaune demonstrations last year.
We've gone ahead and made our reservation for the hotel in Najac for mid-July with the grandchildren.

Spring seems to be here already!

We had our trees pruned last fall, so we don't see much of anything on the branches in our yard, but across the street, the fruit trees are in bloom. Our yard has turned to moss; I'd guess it's 80% moss, now, and I don't see the primeveres (primula), but I do spot them in the neighborhood. Forsythia is in bloom and the magnolia trees are budding. The roses have sprouted new leaves and I guess the buds will be coming, soon. My parsley didn't die this winter, and we've had fresh parsley a lot. I'm thinking I should do some preparation work on the vegetable garden boxes, but I can't help but think that a freeze could come.
Here, we had a wonderful visit by Claire, Aurelia, and Constance from England and Emma from the Tarn-et-Garonne. It was a short week, but the aunts, uncle, and cousin had a chance to meet Constance. Of course it rained a lot, so it was not great for going outside and doing things. I did take Aurelia to the library with Sacha. Aurelia got to use the umbrella and Sacha didn't complain when I put the plastic bubble on the stroller. We went to pick him up and took the long bus ride to the library, singing "The Wheels of the Bus..." and "I had a tiny turtle..." all the way, to the delight of Sacha. Then, we sang again on the ride back after the "lap-sit". The whole family gathered for a pizza party at Louis and Gwen's.
Other than that, it was a wet and windy month of very mild temperatures and not much activity.
I wanted to get rid of my US tax declaration, but many French institutions and administrations don't post their year-end statements until March or April, or even May. Some have come dribbling in, but I'm still waiting for others, so it's not worth opening the software to do only partial work. I think I can finish the FBAR, though. Get that out of the way, at least. I'll have to do it before April 15th, just to have an idea of what I may owe, so I can send in a check. I'll have to take the automatic extension (allowed to those who live abroad) to figure out the final figure, though.
AARO is having two tax seminars, again, this year. March 13, for those who are new to filing their US taxes (newcomers overseas, new to filing, or thinking of doing it yourself for the first time...) and March 17 for more experienced filers, who need to learn what's new this year or who have complicated returns. We hope a lot of new, young people will come. They are often unaware of their filing obligations because they owe no tax. If you know any Americans in or near Paris, let them know of these events.

Calming down - but not completely

I've had a few conversations with Fidelity reps in the days since I got that horrendous phone call. They all repeat that this is the new policy. I haven't received any letter. My kids, who also have similar accounts, have not received telephone calls or letters. I asked if, perhaps, the new policy had been rescinded, but was told that no, it had not and that my letter had gone out on May 9. Well, it's the 22nd today and I still don't have it. I have made some suggestions -- that such important letters that indicate tremendous changes to our accounts should be sent out be registered mail and the clock ticking on the new policy should not start until the date received, not the date sent, that changes to the welcome page on the website that require you do accept or decline should allow you to see the options of what happens if you decline before you actually click the button, not once you have clicked. (Really bad website design!) I did not click; I called and asked what the options were, and since the international options are not available to US citizens, of course, I ended up clicking the "Accept" button.
I've been following an excellent blog, The Franco-American Flophouse, and its author, Victoria Ferauge, is a much better writer than I am, much more articulate, a journalist, really. She has been writing about all sorts of subjects, which I'll let you discover, but one of her pet peeves, like mine, is US tax law concerning residents abroad. Today's post announce a meeting in Brussels on the EU and FATCA next week. I won't be able to attend, but if any of my readers are able to, I strongly recommend attending.
No other news of great import. It's been raining a lot, but it looks like today may be nicer. Sacha is growing. Claire and Geoff are weeding through girls' names and it looks like they've settled the matter, but I'm keeping mum until the baby is actually born. Anne is home for a few days between Prague and a visit to England with a couple of days in London at the end. Emma is off to Switzerland for a few days. Paul and I are finished with our bad colds, although he's still a bit congested. I'm still trying to scan a few photos a day to finish reproducing our old albums. I'm up to 1997 and from 2006, we already have the newer, printed albums, so with less than a decade to go, I hope to finish this before the end of the year.

Ranting and Raving Mad - Second Class Citizenship

I am not a tax professional. I am an active member of AARO. As an active member, I was privileged to participate in Overseas Americans Week in February 2013.
If what I write below is erroneous, please send me a comment so I can correct it.

Let us start with FATCA and take a cool-headed look at how FATCA affects us US citizens (and non-citizen US taxpayers).

Depending on Intergovernmental agreements (IGAs), or their absence, foreign financial institutions must declare, to their government or directly to the IRS, the existence of your accounts and the amount in them. For bank accounts, they will not have to report holdings under $50000 and for other investment accounts, amounts under $250000. We, however, may be required to report these accounts, even if the banks do not. That depends on the total amount in our accounts and our filing status.

Single or married filing separately. If the total amount in all the accounts outside the US is not greater than $200000, then we do not have to file form 8938. If the total amount in all the accounts outside the US is greater than $10000, we must file form TD F 90-22.1 (the FBAR form).

Married filing a joint return. The threshold for form 8938 is $400000. For the FBAR,  it's still $10000.

So much for the filing requirements, which are simplified, here. If there is an exceptional short-term deposit which carries the total amount in the accounts above the threshold, there are other dispositions, and these are covered every year in the AARO tax seminars.

Many Americans abroad do not have to file form 8938. They do not have such savings abroad. That does not mean that FATCA has not affected them. It has made opening or maintaining accounts in the countries in which we reside difficult, if not impossible, because banks are reluctant to hold these accounts that will create such expensive reporting requirements, and in some countries, these requirements are contrary to local law on privacy. There has been a modification to the FATCA rules that requires banks to not discriminate against US persons, but it is not clear how that rule will be enforced. If you live abroad, either full time or part time, and you need a local account, FATCA has affected you.

Many Americans who live abroad do not have significant savings abroad because they have maintained an investment account in the United States. Now, US brokerages are closing or restricting accounts held by US citizens with foreign addresses. There's no law telling them to do this; it's their new policy. Policies from one brokerage to another are not consistent. The closures or restrictions seem to depend on the country of residence. There's no clear explanation, but it looks like it may be linked to which countries have entered an IGA with the US about FATCA. If any of us were thinking that we were lucky not to have to deal with the FATCA business because our money was still in the States, we are now stuck.

I'm going to skip the long diatribe about how the FBAR and FATCA filings affect us finding jobs, creating companies and partnerships, taking on responsibilities with associations -- anything to do with our having a signature on a bank account. Short story -- negative effect.

What are we to do? Where are we supposed to be investing our savings? How?

There is a second issue. Some Americans who live abroad do not have bank accounts in the US. Either they have never lived in the US, or they left and closed their accounts when they realized they would be residing abroad indefinitely. Since the passage of the Patriot Act, banks have refused to open accounts to US citizens who do not have a local address. This is not part of the law, but it is the policy based on the “know your customer” requirement. It is discriminatory. The workaround solution is to claim residence at parent's, sibling's, or friend's homes. In fact, the bank clerk might suggest this solution. In effect, they will know you to be a liar and that is okay. I have never done this. To claim one address to a bank and then another, foreign address, to the IRS, seemed hypocritical.

I have lived in France for over 40 years, having married a Frenchman while still a student. The money in the States has its origins in the States, from my very modest saving account and  mostly thanks to the success of my parents. It is not money that was earned in France and stashed in the US. Likewise, the savings my  husband and I have here in France originate here, our savings. I closed the checking account as I no longer used it; that was a mistake because when after my mother died, it would have been easier if I had a checking account, but I couldn't open one. (Well, the clerk did suggest I use a bogus address and I balked since the reason I could not use my French address was the "know your customer" rule!) The investment account is my sole account in the US.

Is it the intent of US financial institutions that we remove our funds and import them to our country of residence? I could do that. And I suppose, that over time, that is what will happen. Can you imagine what life would be like for US citizens who move from country to country (for work)? If they have not maintained an address in the States, they no longer have a home base.

My own dilemma is Fidelity Investments phone call this week warning me that I would be receiving a letter with the details of the new restrictions on my account: I can sell, but will not be able to buy securities. I will not be able to deposit new funds to the account. My investment account, in effect, over time, becomes a cash account in which I will only be able to withdraw funds, to my understanding. My children, who have accounts at Fidelity, are in the same predicament. The restrictions are linked to our living in France. What has France done, or not done, to warrant US financial institutions treating US citizens like this?

Please, do not imagine that money is my sole connection to the US. No, it is not. I still have family and I still feel American. I am proud to be an American. I am sick of America making me feel unwanted. I have been a member of AAWE and AARO, organizations that fought for our rights to transmit our citizenship to our children and grand-children and to vote, fought for more reasoned thought into how we are taxed by the US. I am sick to find myself telling my children it might not be such a good idea to burden their children with US citizenship.

Can financial institutions in the US have such discriminatory policies? Is it legal? There is no law, it seems, that imposes these policies; it's the instituion's new policy; like it or leave. But leave for where, since all the institutions are doing this? And at what cost. If I had to sell all my mutual funds and stocks in a single stroke, I'd have excessive capital gains taxes.

As I noted at the beginning, I am mad. My discourse is not as well-organized as I'd like it to be. I have already written to my Representative, Chaka Fattah, to my Senators, Bob Casey and Pat Toomey, to Representative Carolyn Maloney, who is the chair of the Americans Abroad Caucus and the House Committee on Financial Services and who is also the sponsor of HR597 To establish a commission to study how Federal laws and policies affect United States citizens living in foreign countries. 

You can support HR597. You can write to your Congress people: If you, yourself, live outside the US, this letter. And if you are in the US and have family or friends who live abroad, use this letter.

And to give your opinion on tax reform -- in favor of RBT (Residence Based Taxation) for we who live overseas, consideration of accounts in one's country of residence as local, not foreign accounts, elimination of FATCA requirements that are strangling financial services.... Or maybe you disagree. 

Word for Word in Paris

The San Francisco company, Word for Word, has been coming to Paris for the past 18 of its 20 years in existence. They are an eagerly awaited annual event. This year's performance was "You Know When the Men are Gone", two of the collection of short stories. This review in the Huffington Post is more eloquent than I can be.
And that's all that is interesting. I've dealt with the family's US taxes, for the time being, at least. The sun came out and I went to the baseball game yesterday, but didn't stay long. I preferred to continue walking. We watch Sacha grow and will celebrate his birthday, soon. I've just finished reading Jodi Picoult's The Storyteller and am currently reading Tom Wolfe's Back to Blood. Now, off to an appointment. My checklist is done for the day!

remarks on remarks

This started out as a comment on Ken Broadhurst's post, in which he remarked on French taxes. 

Ken said there was talk of eliminating the income tax here. I hadn't heard of a move to eliminate the income tax. There's been a move to remove the yearly estate tax and it's going to be altered this year so that households of over €1.3 million are at the low end rather than €750,000. The old minimum took in too many not so rich people who lived in places where home prices are up there. Just owning your home made you rich. And there has been talk of a super tax on super salaries, but they haven't defined "super" yet. This reminds me that I should start our French declaration. The French declaration is very simple; most of it is pre-filled so I just need to add US dividend and interest income (for calculation of the tax base). We don't have to do any of the calculations; their computers do it for you and you get the final notification in the fall and finish paying it off or get a refund. After doing the US declaration, this is a breeze.

The VAT  (value added tax) is the biggest income producer for the country. Some say it's unfair because everyone has to buy things, so the poor are taxed more heavily in proportion to what they can afford; they spend more of their income. In Pennsylvania, where I'm from, food and clothing were not included in sales tax (don't know if that's still the case), to address that problem. Here, no. The VAT is about 20% and it's included in the price tag. So if a printer costs €100, that TTC (Toute taxe comprise) and that is what you pay. When you are comparing prices, it's useful to take that into consideration. If a printer costs $75 and you have to add 6, 7, or 8%, depending on where you live in Pennsylvania, then in the end that printer might actually be less expensive in France. That is just a hypothetical situation; whenever I really calculate, it's almost always cheaper in the US, even when the dollar is stronger.

Energy has extra taxes, so that our liter of gas is an enormous amount of tax for very little actual cost of the stuff. At our current €/$ rate, it's about $2.25 per liter (*4 brings you up to about $9 per gallon!) I almost laugh when US friends complain about the price of gas there.

What else is new? AARO had its annual general meeting at the Tallyrand building on rue St. Florentin. We had an excellent speaker, François Heisbourg, who spoke about the US and the new world "disorder". He started with a joke about the president walking on water, but it seems more like trying to walk on eggs. The Hôtel de Tallyrand  is where the consular services used to be, where we got our passports renewed and reported the birth of our babies, where foreigners got their visas. Now the consular services are at the embassy and this building has been completed restored. Part of it is still US, the George C. Marshall center (because it was the headquarters for the Marshall Plan). The rest has been rented out to a law firm. It's beautiful. I was volunteering -- greeting people at the staircase to urge them to go up to the meeting -- and people stopped to admire and remember, "that's where the security gates were." "That's the old passport office."

Tuesday evening we got together with the kids; Claire was in Paris on business and spending the night at Louis and Gwen's. This morning, Anne left for Cannes. She got her list of movies she wants to see. Last year she was a little disappointed, so I wish her better luck this year. Tomorrow, if it's not raining, I'll go over to the ballpark and root for the PUC. I haven't been to a game since about this time last year. Emma, we think, is still in the southwest of France, but according to her last very short e-mail, she's somewhere where the internet connection is very intermittent and there is no cell phone service.