Overseas Tax Obligations, Another Party, and Drying Clothes without a Dryer

Working Without a Clothes Dryer

I wish the weather forecasts would be more accurate and more detailed.   Although some people have

dryers, most do not and hang their clothes either on an outside line off of their balcony or window, or they use the lines that are set up on the rooftop of their building, or they have a foldable indoor line.  I do not have a dryer nor do I have a foldable indoor line for hanging clothes.  I checked the weather forecast and thought that the rest of the day would be rain-free.  I did a load and hung it out to dry this afternoon.  After dinner I was just starting to work on this blog when I heard some raindrops hit the balcony.  I quickly got out a sheet of plastic to cover the clothes, which I was using for the first time, only to discover that it was not long enough and it only covered a little more than half the clothes on the line.  Oh well.  It will just take a little bit longer to dry (sigh).

Second House-warming Party

Last Tuesday was my second house-warming party.  It was a smaller and more manageable group of 9 of us.  This group is my Tuesday night dinner group.  We meet every Tuesday night at the restaurant El Bierzo A Tope (El Bierzo to the Max).  El Bierzo is a comarca (similar to a county) toward the northwest part of Spain.  So this Tuesday I put a sign on my door - "Restaurante Fiorito A Tope" and was ready for my guests to arrive at 9:30 pm.

With only nine of us, we were able to sit around the table, which made the evening much more relaxing and enjoyable, at least for me.  With red and white wine available, I served bellota (acorn-fed)-cured ham, olives and bread.  I then had a salad, meatballs in a light tomato sauce along with a type of Peruvian chicken.  For dessert we had flan and Tiramisu.  I then broke out the Cava (sparkling wine) and finished off the evening with Illy coffee and after-dinner drinks.

My guests seemed to enjoy the house and were especially taken with my cat, Sunset.  She was the star of the evening!

Virginia State Taxes - Ugh!!

On March 10, I moved permanently out of the state of Virginia to Barcelona.  I made the incorrect assumption that once I moved out of the state I would no longer be liable to pay state taxes.  Before I left, I called the state taxation office asking them how to ensure that I would be not held liable for future state taxes.  I was told that once I establish my permanent address in Barcelona, I needed to use the state taxation chat system to give them that information.  I did that in May.

A couple of weeks ago I received an email from the American Consulate here in Barcelona about voter registration for overseas citizens.  Through some links that the consulate provided, I discovered that for purposes of voting, my last US residence would be used for future US elections.  On Friday I went back online on the Virginia taxation chat system to find out how I would go about doing that without incurring an obligation to pay state taxes.  I then discovered that my prior assumption about Virginia state taxes was incorrect.

It turns out that as an overseas citizen, in the eyes of Virginia, I will always be considered a Virginia resident and will be required to pay state taxes indefinitely.  This can only be changed if I were to move to a different US state.  Moving overseas doesn't count.  This has nothing to do with voting rights or maintaining a Virginia driver's license.  Moving overseas from the state of Virginia ties me to the state forever.

I was not happy about this news.  I stopped allocating state taxes after my move to Spain.  I quickly found how to pay my estimated taxes for the last 7 months, which the state will receive in about a week or so. With the payment, I sent a letter explaining why this payment was being made and requested that I be exempt from any possible penalties for underestimated or late tax payments. I also added my state tax allocation on my future pension pay statements.

What is still up in the air is whether Virginia state taxes is part of the double taxation agreement between Spain and the U.S.  Basically, taxes that I pay to the U.S. is credited to the taxes that I would owe Spain.  For example, if I have a tax liability of 25% to the U.S. and a 30% tax liability to Spain, I would pay the full 25% to the U.S. and the remaining 5% would be paid to Spain.  This is a great simplification of the tax obligations between these two countries, but in my case this is what I would do since I receive a U.S. pension.

The question is whether I can add my Virginia state taxes to the credit that I would receive from Spain for Spanish taxes.  If that is the case, then my total tax liability would be the same.  The only difference is who would receive these tax dollars.  If not, then I would have to pay additional taxes to the state of Virginia.  I sent an email to the Spanish Consulate in Washington DC to clarify this for me.  I'll see what they say.......

UPDATE ON VIRGINIA STATE TAXES

I found out that the two most stringent states that require its overseas residents to continue to pay state taxes are Virginia and New Mexico.  In order to discontinue my obligation is to either move to a different state or to disown anything that is associated with Virginia, which includes my Virginia drivers license.  So I called Virginia DMV and deactivated my drivers license.  I also contacted the Virginia voter registration and said that I moved out of the state and to remove me from its database as an active Virginia resident.  I then received a document from the state of Virginia that explains how I could reestablish residency (NOT!).  Based on that document, I do not meet the requirements of being a Virginia resident.  Unfortunately, I am now not able to vote since I am not a resident of any state.  It's a heavy cost, but the economic costs to pay taxes to a state in which I do not reside is a heavier cost.  If I knew this prior to my move, I would have moved to a state like Delaware or Florida 3 months before and then I would have been able to maintain state residency and be able to vote without being required to pay taxes since my actual residence is outside of the state.  Live and learn. 

These are parting shots of the life of the Housewarming party - Sunset!!