Reciprocal licensing agreement with Australia

[lymphocyte]

The tax thing I'd like to know more about because the last time I looked into it (about 2 years ago) I learned about the double taxation. Once in the US and once in the other country.

Fair warning, I'm not a tax professional, and what's below is only meant in general terms for the purposes of discussion and sharing information. You need to consult a qualified tax agent or attorney to receive a professional appraisal about your particular circumstances.

That being said, @Ericslv, please reference IRS Publication 54, which explains foreign taxation quite well.

https://www.irs.gov/publications/p54/

"In most cases," it explains, "if the foreign tax rate is higher than the U.S. rate, there will be no U.S. tax on the foreign income." Why? Because you can claim as a credit all paid foreign income taxes against your American tax liability. If the credit exceeds the liability, you can even carry it forward for up to 10 years. (The retirement implications of that are insane.) This system works well for countries with a generally higher tax rate, like Australia. This is called the foreign tax credit. To file for this, you need to append Form 1116 to your Form 1040 (you cannot use 1040EZ or 1040A).

Most people only know about the foreign earned income tax exclusion, which essentially exempts the first $102,000USD from your adjusted gross income--it's like that money never existed in the first place. (But for anybody who earns more that, it will almost always be more advantageous to take the foreign tax credit). To file for the exclusion, you need to append Form 2555 or 2555EZ to your Form 1040.

So, two separate things: foreign tax credit and foreign earned income tax exclusion.

Regardless of which you use, you also need to file Form 8938, which discloses the total amount of foreign financial assets (savings accounts, etc.).

It sounds complicated but you can knock out all the paperwork in an afternoon. And, of course, you have to file your Australian taxes first (which are thankfully much easier to do). Here's what you can expect to pay in Australia: https://www.ato.gov.au/rates/individual-income-tax-rates/

Now, there are some crazy loopholes, which I'll only touch on briefly. For example, the Pay As You Earn repayment plan is based on Adjusted Gross Income (AGI). So, if you take the foreign earned income tax exclusion, and earn less than $102,000USD (like almost every trainee...), then you pay $0 repayment. AND that $0 repayment still counts toward the 20-25 year debt forgiveness. If you start harvesting capital losses, housing credits, salary pre-packaging, and, paradoxically, student loan interest deductions, you can push your AGI so low that you never have to pay back a dime of student loans. Very crazy loophole. Doesn't seem ethical, but there you go.

And don't get me started about becoming a foreign shareholder of your own S-Corp, SEP IRAs, etc. The rabbit hole goes deep, and these rules were no doubt well-lobbied for people way richer than you or me.

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[Ericslv]

Fair warning, I'm not a tax professional, and what's below is only meant in general terms for the purposes of discussion and sharing information. You need to consult a qualified tax agent or attorney to receive a professional appraisal about your particular circumstances.

That being said, @Ericslv, please reference IRS Publication 54, which explains foreign taxation quite well.

https://www.irs.gov/publications/p54/

"In most cases," it explains, "if the foreign tax rate is higher than the U.S. rate, there will be no U.S. tax on the foreign income." Why? Because you can claim as a credit all paid foreign income taxes against your American tax liability. If the credit exceeds the liability, you can even carry it forward for up to 10 years. (The retirement implications of that are insane.) This system works well for countries with a generally higher tax rate, like Australia. This is called the foreign tax credit. To file for this, you need to append Form 1116 to your Form 1040 (you cannot use 1040EZ or 1040A).

Most people only know about the foreign earned income tax exclusion, which essentially exempts the first $102,000USD from your adjusted gross income--it's like that money never existed in the first place. (But for anybody who earns more that, it will almost always be more advantageous to take the foreign tax credit). To file for the exclusion, you need to append Form 2555 or 2555EZ to your Form 1040.

So, two separate things: foreign tax credit and foreign earned income tax exclusion.

Regardless of which you use, you also need to file Form 8938, which discloses the total amount of foreign financial assets (savings accounts, etc.).

It sounds complicated but you can knock out all the paperwork in an afternoon. And, of course, you have to file your Australian taxes first (which are thankfully much easier to do). Here's what you can expect to pay in Australia: https://www.ato.gov.au/rates/individual-income-tax-rates/

Now, there are some crazy loopholes, which I'll only touch on briefly. For example, the Pay As You Earn repayment plan is based on Adjusted Gross Income (AGI). So, if you take the foreign earned income tax exclusion, and earn less than $102,000USD (like almost every trainee...), then you pay $0 repayment. AND that $0 repayment still counts toward the 20-25 year debt forgiveness. If you start harvesting capital losses, housing credits, salary pre-packaging, and, paradoxically, student loan interest deductions, you can push your AGI so low that you never have to pay back a dime of student loans. Very crazy loophole. Doesn't seem ethical, but there you go.

And don't get me started about becoming a foreign shareholder of your own S-Corp, SEP IRAs, etc. The rabbit hole goes deep, and these rules were no doubt well-lobbied for people way richer than you or me.

Thank you for the detailed info. I will consult my attorney.

 

[lymphocyte]

As promised, here is more information about transferring ABFM to Australia. Depending on your postgraduate experience, you might have to do a year of supervised practice (again 3 vs 5 years of training):

http://www.racgp.org.au/selfassess
http://www.gprecruitment.com.au/sites/default/files/general_practice_qualifications.pdf

The best way forward is probably to contact a locums agency. They should handle visas, licensing, taxes etc. Doing locums should also help you establish contacts and give you a taste of life in Australia or New Zealand. Rural Australia is desperate for good GPs. Standard remuneration seems to be about $2000AUD/day + accommodation and travel. I cannot vouch for any of the locums agencies, but they are pretty easy to find if you Google "locums Australia." Here's one example (that I'm NOT vouching for): http://ochrerecruitment.com/doctors/doctors-from-overseas/

After locums, here's what you can expect in terms of renumeration (for outpatient work--more for inpatient, OR, ED, etc.): https://gpra.org.au/gp-earnings-calculator/

PM me if anybody has specific questions.

 

[deleted87716]

Most FP's in the US talk alot about what they can do but do very little. Most do chronic care or urgent care.

So, it's just chronic or urgent care? Is there another kind...? Feel free to elaborate.

SDN has lots of idealistic people on here. The reality of FM ON SDN is that no one really wants to do it and most programs barely fill in their match. It is one the least sought after.

FTFY.

And regarding skin clinics. I wasn't talking about cosmetics and simple mole removal. I was talking about skin cancer and mohs surgery.

Then you should've gone into derm. What's that old saying...? "Poor planning on your part does not constitute an emergency on my part." Don't blame FM for your failure to match into the specialty you think you deserve.

 

[Ericslv]

So, it's just chronic or urgent care? Is there another kind...? Feel free to elaborate.



FTFY.



Then you should've gone into derm. What's that old saying...? "Poor planning on your part does not constitute an emergency on my part." Don't blame FM for your failure to match into the specialty you think you deserve.

1. other countries FM can do anesthesia and surgery. In the US it's very limited.
2. FTFY?
3. I didn't want to go into derm. No poor planning. I don't blame FM. I blame the people who have chosen to ruin it. Like AAFP.

Cheers.

 

[deleted87716]

I don't blame FM. I blame the people who have chosen to ruin it. Like AAFP.

Sorry, you'll have to be more specific.

If you want to practice FM in other countries, what's stopping you?

 

[Ericslv]

Sorry, you'll have to be more specific.

If you want to practice FM in other countries, what's stopping you?

No one is stopping me. What's it to you?

AAFP supports policies like medical home and MOC and BC that I and many others disagree with. Their lobby efforts and support of certain organizations weaken medicine and FM.

 

[deleted87716]

No one is stopping me. What's it to you?

Sounds like you'd be happier, that's all. Constant complaining certainly isn't going to make anything better.

AAFP supports policies like medical home and MOC and BC that I and many others disagree with. Their lobby efforts and support of certain organizations weaken medicine and FM.

MOC and BC requirements are hardly unique to FM. What specific lobbying efforts and organizational support do you feel weaken medicine and FM?

 

[surrender903]

1. other countries FM can do anesthesia and surgery. In the US it's very limited.
2. FTFY?
3. I didn't want to go into derm. No poor planning. I don't blame FM. I blame the people who have chosen to ruin it. Like AAFP.

Cheers.

FTFY = fixed that for you

 

[VA Hopeful Dr]

Sounds like you'd be happier, that's all. Constant complaining certainly isn't going to make anything better.



MOC and BC requirements are hardly unique to FM. What specific lobbying efforts and organizational support do you feel weaken medicine and FM?

And honestly, I think our MOC is much better than most. Our board is one of the few that says "any CME counts so long as its been OK'ed by the AMA" and our yearly things aren't all that onerous. I mean, I dislike Part IV as much as the next guy but when you see the crap that some of the other boards make their diplomates go through...

 

[yayforscrambling]

was in AUS for a little more than a month... fell in love with it... to the point where I just want my student loans paid off and go there!

Got in touch with A LOT of "GPs" there... (lots of family helped me there with getting in touch with the right people at the right time)...

so I've been emailing these GPs back and forth... will for sure keep this thread posted with anything I may learn that hasn't already been mentioned. Yes, it's reciprocal. However, it's definitely really complicated, which I think this thread is starting to hit upon. Think of Brexit, the new policies they'll have (if they really do exit the EU) and I see them implementing the same system already in place in AUS (i.e. points awarded for certain things (e.g. certain occupations), accumulating enough points to land a type of visa that would allow you to work). It seems we foreigners (when I say foreigners I mean US citizens because it's a different process for every other country) have to pay a larger tax amount for a while compared to AUS citizens.

Again though, I'm really just starting to learn about this and could be way off base.

I guess I just wanted to let you know that I'm also doing a lot of research on this.

Very awesome thread though. Thank you.

 

[Ericslv]

was in AUS for a little more than a month... fell in love with it... to the point where I just want my student loans paid off and go there!

Got in touch with A LOT of "GPs" there... (lots of family helped me there with getting in touch with the right people at the right time)...

so I've been emailing these GPs back and forth... will for sure keep this thread posted with anything I may learn that hasn't already been mentioned. Yes, it's reciprocal. However, it's definitely really complicated, which I think this thread is starting to hit upon. Think of Brexit, the new policies they'll have (if they really do exit the EU) and I see them implementing the same system already in place in AUS (i.e. points awarded for certain things (e.g. certain occupations), accumulating enough points to land a type of visa that would allow you to work). It seems we foreigners (when I say foreigners I mean US citizens because it's a different process for every other country) have to pay a larger tax amount for a while compared to AUS citizens.

Again though, I'm really just starting to learn about this and could be way off base.

I guess I just wanted to let you know that I'm also doing a lot of research on this.

Very awesome thread though. Thank you.

Thank you for your input.

 

[lymphocyte]

was in AUS for a little more than a month... fell in love with it... to the point where I just want my student loans paid off and go there!

Got in touch with A LOT of "GPs" there... (lots of family helped me there with getting in touch with the right people at the right time)...

so I've been emailing these GPs back and forth... will for sure keep this thread posted with anything I may learn that hasn't already been mentioned. Yes, it's reciprocal. However, it's definitely really complicated, which I think this thread is starting to hit upon. Think of Brexit, the new policies they'll have (if they really do exit the EU) and I see them implementing the same system already in place in AUS (i.e. points awarded for certain things (e.g. certain occupations), accumulating enough points to land a type of visa that would allow you to work). It seems we foreigners (when I say foreigners I mean US citizens because it's a different process for every other country) have to pay a larger tax amount for a while compared to AUS citizens.

Again though, I'm really just starting to learn about this and could be way off base.

I guess I just wanted to let you know that I'm also doing a lot of research on this.

Very awesome thread though. Thank you.

No worries at all. I'm glad to be helpful.

I don't understand what you mean about the Brexit and Australia. Australia has no such relationship with a nation or collection of nations like the UK has with the EU. There are benefits to being a Commonwealth citizen (like extended work visas), but that's not going to change soon.

The visa point system is relatively transparent. I would be shocked if an English-speaking doctor from the US without certain major medical comorbidities wouldn't qualify. You very likely wouldn't even need sponsorship.

https://www.acacia-au.com/skilled-migration-points-test.php

Why do you think foreigners pay more in taxes than Australian citizens, especially if they're on a 189, 190, or 489 PR visa?

https://www.ato.gov.au/Individuals/International-tax-for-individuals/

Australia has a tax rate comparable to the US for high-income earners--59% vs 60% at the highest level if you include US state tax.

http://www.europeanceo.com/finance/take-home-salary-for-top-earners-in-the-g20-nations/

 

[yayforscrambling]

thanks so much for the links!

sorry if this sounds stupid, but you kind of lost me when you said "Why do you think foreigners pay more in taxes than AUS citizens..."

I went to the link, and I still couldn't see your point, although I feel like you were trying to make an obvious point, which may have went over my head. Are you saying that since we're technically not Australian citizens (and merely residents), we are still taxed as if we were from the AUS, yet our home countries are also taxing us at the same time? which is why I heard that foreigners are typically taxed more than AUS citizens?

I feel like Brexit might have been a bad example, but a few minutes before writing my comment, I had just finished reading a (very) long article on on how if the UK does exit the EU, it probably plans to use a method almost identical to Australia's immigration system (using points, etc...) The article was speaking hypothetically of course.

I really appreciate the links. I read them and actually bookmarked them.

Thanks again for this (really) informative thread!

 

[lymphocyte]

thanks so much for the links!

sorry if this sounds stupid, but you kind of lost me when you said "Why do you think foreigners pay more in taxes than AUS citizens..."

I went to the link, and I still couldn't see your point, although I feel like you were trying to make an obvious point, which may have went over my head. Are you saying that since we're technically not Australian citizens (and merely residents), we are still taxed as if we were from the AUS, yet our home countries are also taxing us at the same time? which is why I heard that foreigners are typically taxed more than AUS citizens?

I feel like Brexit might have been a bad example, but a few minutes before writing my comment, I had just finished reading a (very) long article on on how if the UK does exit the EU, it probably plans to use a method almost identical to Australia's immigration system (using points, etc...) The article was speaking hypothetically of course.

I really appreciate the links. I read them and actually bookmarked them.

Thanks again for this (really) informative thread!

1. Generally speaking, you only pay American or Australian taxes--whichever is higher--even though you file both. There is no "double taxation," as I explained in a previous post. Double taxation seems to be a common myth. IRS Publication 54 explains most of what you need to know. https://www.irs.gov/publications/p54/

2. Click around the link I provided. It explains taxation in Australia, including what kind of taxes you'd be expected to pay as a PR. For example, your income tax as a permanent resident would be less than your income tax a resident on a working visa. Perhaps that's what you heard anecdotally?

3. I don't know what to think of the Brexit, but it would make migrating to the UK almost certainly easier (perhaps not so for physicians). The Australian immigration point-system has been in place for quite some time, and I see no reason why they'd change it. It has its pros and cons, but Australia already punches way above its weight in terms of resettling refugees, so I tend to find their skilled visa scheme more palatable.

 

[lymphocyte]

This thread is basically turning into my repository on helpful Australia information. I hope that's okay.

I found this website to be an excellent overview of finances for Australian GPs. (It's not a pie-in-the-sky locums agency but a popular accounting firm among doctors.) You'll note the salary range for rural GPs ranges from 400 to 700K+ benefits like superannuation and salary prepackaging.

http://www.mcmasters.com.au/financi...strars-ebook/part-1-introduction-and-welcome/

 

[yayforscrambling]

this thread is exactly what I've been needing! your time is very much appreciated!

 

[Brahnold Bloodaxe]

Good thread. What is the "midlevel" situation like in Australia?

 

[SydneyGP]

Hi all, what about Australian GP becoming American FM?

It seems I need to have 2 years of ACGME training before I can get Board Certified to work. Does that mean I need to re-do my residency after all? (considering FM fellowship is so few).

I live in northern California, and can't move to other states due to family reasons.

Any help would be appreciated.

 

[Ericslv]

Hi all, what about Australian GP becoming American FM?

It seems I need to have 2 years of ACGME training before I can get Board Certified to work. Does that mean I need to re-do my residency after all? (considering FM fellowship is so few).

I live in northern California, and can't move to other states due to family reasons.

Any help would be appreciated.

Call American board of family medicine and they can help about the board certification part.

Call any Medical license company in the US and they can give tell you if you can get a license in California to practice medicine.

 

[bashwell]

I suggest trolling the FM residency program websites looking for non-ABAM fellowships as well as looking for "current fellows" to see the variety of programs being offered.

"Trolling"? Bold move.