[siberianbear]

The $100k you're referring to is the Foreign Earned Income Exclusion [1]. If you're an American working abroad, you don't need to pay income tax on your first $107,600. The exclusion does not apply to self-employment tax or investment income.

That's not even the real problem, though. The problem is that banks don't want to deal with the FATCA compliance issues and just refuse to deal with Americans, period. I've experienced this firsthand as an American expat and it is a colossal pain in the ass.

[1] https://www.irs.gov/individuals/international-taxpayers/fore...

[math]

I was affiliated with a company in Singapore which had it's bank account closed, I believe due to FACTA, even though at the time no one involved with the company had ever been to the US and didn't have any ties to the US. It was simply that the size of the account was too small to justify the associated administrative burden. FACTA has impact beyond US citizens - pretty annoying.

[KLexpat]

I work in finance and it IS a colossal pain to deal with the FATCA compliance.

There is no official guidance to FATCA and its processes, and every country has passed its own FATCA related regulations. Therefore running a FATCA compliant entity in say france requires you to comply with all french laws around fatca. Which also leads to issues with GDPR. This creates a cost of several hundred thousand USD per year just to deal with US clients for most western finance companies, per country they do business in.

Or - simply flatly refuse to offer services to any US citizens and rest easy knowing the IRS isn't going to ruin your life just because a US citizen tried to open an account without even depositing a single cent, but you didn't file your IRS stuff correctly

[sjg007]

What about a multinational bank like Citi bank or HSBC etc... I would assume they have experience in these issues.

[KLexpat]

If you're in a country like Malaysia, the domestic branch of a multi-national bank may not accept US citizens, because the Malaysian branch doesn't deal with FATCA/US gov.

[djohnston]

Does this mean you get double taxed on everything over 107?

[names_are_hard]

No. If you earn more than the allowable amount for the Foreign Earned Income Exclusion (FEIE), you claim the Foreign Tax Credit instead. Under the FTC, you essentially pay the higher of the two tax rates. Except the accounting can get tricky if you have multiple sources of income that are taxed at different rates between the US and the foreign country.

For example, if you earn 200k in a foreign country and that country charges you 75k on 190k of that, and decides that 10k doesn't count for some reason. Suppose the US rates are such that you owe 60k on 190k, then the FTC erases that 60k. But you might still owe 3k on the remaining 10k that the foreign country ignored.