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[pct-l] Re: Isn't Hiking Free



Of course the IRS says if you are a US citizen you must pay income tax on
interest income from foreign sources.

Ken
----- Original Message ----- 
From: "Kraig Mottar" <kraig.mottar@verizon.net>
To: "Ilja Friedel" <pctl@ilja.ws>; "Aloha!Ann" <AlohaAnn@adelphia.net>
Cc: "PCT Backcountry" <pct-l@mailman.backcountry.net>
Sent: Monday, December 13, 2004 11:04 AM
Subject: Re: Re: [pct-l] Re: Isn't Hiking Free


Of course there is one flaw, limitation, and oversight of your argument. It
is premised on money sitting in a US bank account, thus snaring the money in
the US tax system. Not a wise place for your money, and fortunately not the
only place you can put your money. In this day and age you don't need to
purchase an airline ticket and briefcase to send money overseas.

Kraig

> From: Ilja Friedel <pctl@ilja.ws>
> Date: 2004/12/12 Sun PM 08:12:56 PST
> To: Aloha!Ann <AlohaAnn@adelphia.net>
> CC: PCT Backcountry <pct-l@mailman.backcountry.net>
> Subject: Re: [pct-l] Re:  Isn't Hiking Free
>
> Hi Ann,
>
> On Sun, 12 Dec 2004, Aloha! Ann wrote:
>
> > 2001 = no income outside of any investments; 2003 = well, I
> > won't repeat what I actually said when my W2 arrived and the taxes were
> > completed.  Let's just go with... it hurt.  It really hurt.
>
> You touched an interesting point. Tax law treats people with highly
> variable income over the years (say thru-hikers) much harsher than people
> with constant income. Let us ignore inflation etc. for a moment. If two
> people where to make one fat million dollares over their lifetime: One of
> them in 25k pieces over 40 years - the other person 50k a year for 20
> years (lets assume the latter person where thru-hiking in odd years and
> doing double jobs in even). Because of the progressive tax system the
> second person would have made less money after taxes than the first. Lets
> call this unfairness the "thru-hiker penalty".
>
> What should the thru-hiker do to not be taxed so unfairly? The main idea
> is to smoothen out the income over the tax years. One way of doing so is
> to thru-hike trails on the southern hemisphere. Their summer season starts
> in October and lasts thru April. Now how do we relocate the PCT to Chile?
> ;-)
>
> Another idea (I have no particular knowledge about tax law) would be to
> use tax defered accounts. (Something like IRA, 401k etc.) In the fat years
> one would have to massively invest into these and avoid being taxed at the
> highest bracket. Should one draw from them during thru-hiking years? There
> usually is a 10 percent penalty. So I don't know.
>
> But an interesting idea would be as follows: most people here agree that
> thru-hiking is relatively inexpensive on the trail (on the order of USD
> 500 - 700 a month). Other fun activities would be traveling around the
> world and hiking Siberia, the Himalayan or Australia. (I have friends that
> traveled around the world on a USD 600 - 1000 per month budget - scuffy
> student/hiker standard). If one where willing to explore the world at age
> 50, say for 5 years, the tax defered account could grow quit a bit -
> without even contributing during this time. Early retirement at age 55?
> (After having traveled the world for half a decade!)
>
>
> Ilja.
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