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“America is a land of taxation that was founded to avoid taxation.” - Laurence J. Peter In this article, we’re going to provide a comprehensive overview of the Foreign Earned Income Exclusion, one of the primary means of reducing your US tax bill as an American living overseas. In this article, you’ll learn about: • What is the Foreign Earned Income Exclusion? • How to qualify for the Foreign Earned Income Exclusion • What is a tax home? • What is the Physical Presence Test? • What is the Bona Fide Residence Test? • What is foreign earned income? • How to claim the Foreign Earned Income Exclusion • Filing IRS Form 2555 instructions • What is the Foreign Housing Exclusion or Deduction? • Foreign Earned Income Exclusion FAQs What is the Foreign Earned Income Exclusion? The Foreign Earned Income Exclusion is an IRS provision that allows Americans living abroad to exclude their earned income from US tax. Unfortunately, however, the FEIE isn’t a silver bullet that automatically cancels an expat’s US tax bill. This is because the FEIE isn’t applied automatically, but has to be claimed each year by filing a Form 2555 when you file your US federal taxes. Furthermore, there are a number of restrictions on who can claim it and what income can be excluded, so whether or not it’s worth claiming the FEIE depends on each expat’s individual circumstances. For example, many expats benefit more from claiming the Foreign Tax Credit instead; in fact, under certain circumstances, it’s even worth claiming both. Another potential drawback of claiming the FEIE is that it only lets you exclude up to a certain amount of your income. Every year, the IRS adjusts the maximum amount you can exclude for inflation, illustrated as follows: • In 2020, the maximum was $107,600 • In 2021, the maximum was $108,700 • In 2022, the maximum was $112,000 • In 2023, the maximum is $120,000 You can revoke your choice to claim the FEIE in any tax year by attaching a statement to your current tax return or, to an amended prior year return detailing your decision. It’s notable that if revoked, you may not be able to claim the FEIE for the next 5 tax years. There is a process to request approval from the IRS if you wish to claim the FEIE within that 5 year period however, it can be complex, time consuming and doesn’t always result in a successful outcome. Therefore, when revoking it’s important to consider your anticipated tax residence and earned income position for the proceeding 5 year years. - Josh Reeves, Moore DM How to qualify for the Foreign Earned Income Exclusion To establish whether you can claim the Foreign Earned Income Exclusion, there are several concepts that allow the IRS to determine whether you qualify as living abroad. These concepts include where your Tax Home is, and whether you meet either the Physical Presence Test, or the Bona Fide Residence Test. We’re going to look at these concepts in more depth, but the purpose of them is to ensure that the FEIE is only claimed by Americans who genuinely live abroad. The other factor is the types of income you have, as the FEIE only lets you exclude earned income. Earned income includes all income from employment, self-employment, or any other compensation for a service you’ve provided in the same tax year, and therefore also includes tips, bonuses, and benefits in kind such as accommodation, transport costs, and meals. What is a Tax Home? To claim the Foreign Earned Income Exclusion, your Tax Home must be in a foreign country. US overseas territories and dependencies aren’t considered to be foreign countries. Your Tax Home is normally the place where you are when you work, assuming you work in one place. If you work in different places, for example if you travel a lot, then the place where you normally live is considered your Tax Home. So if you live in the US but are posted abroad for 6 months, it is unlikely that you will be able to qualify for the FEIE, as your Tax Home will still be in the US. If you move abroad and set up a home in another country on the other hand, then you have moved your Tax Home, and you therefore qualify. The difference can come down to whether or not you can prove that you have settled in another country, such as by opening a bank account, joining local clubs, owning a car, or shipping your belongings, perhaps. Giving up or renting out your old home in the US is also a helpful indicator. Pilots and mariners who spend the majority of their time in the air or at sea outside the US don’t normally qualify for the FEIE, as they don’t move Tax Home to another country. This is also true for US astronauts, such as those on the International Space Station. Famously, Jack Swigert, one of the astronauts on the Apollo 13 mission, suddenly realized that he hadn’t filed for an extension after lift off, and radioed Houston in a panic. He soon had bigger issues to think about, of course. What is the Physical Presence Test? Once you have established that your Tax Home is abroad, to claim the FEIE you also have to meet either the Physical Presence Test or the Bona Fide Residence Test. The Physical Presence Test means that you spent at least 330 days outside the US and in another foreign country in a 365 day period. This period normally refers to a tax year, but it doesn’t have to, so if you move abroad (or back to the US) in the middle of a year, for example, you can claim the FEIE for the next (or previous) 365 day period. 330 days means 330 full days, meaning that days in which you are travelling from or to the US don’t count. Days when you aren’t in any other country, such as if you were at sea on a cruise, also don’t count as being outside the US for the purposes of claiming the FEIE, either. What is the Bona Fide Residence Test? Alternatively, you can qualify for the FEIE through meeting the Bona Fide Residence Test. The Bona Fide Residence Test means you are resident in another country for at least a year, including a tax year, and with the intention to stay there for an extended period or indefinitely. The definition is deliberately vague, and the onus is on the expat to demonstrate that they are a resident of another country to meet the test. Typically, this means proving that your permanent home is in a foreign country and you have an active bank account there, and you have the legal right to reside there, or you pay foreign taxes there. What is foreign earned income? Once you have met one of the two tests for living abroad, you can claim the FEIE, but you can only exclude foreign earned income. Earned income, as mentioned above, includes salaries, wages, commissions, bonuses, professional fees, self-employment income, and tips. Unearned or passive income can’t be excluded using the FEIE however, including rents, interest, dividends, pensions, gambling winnings, and social security payments Earned income is considered foreign earned income if your Tax Home is outside the US, regardless of where in the world your income is paid, including the US. The only exception is any income you earn when physically working in the US, which isn’t considered foreign earned income. If you claim the Foreign Earned Income Exclusion and exclude all of your income, you may not be able to make contributions to a Roth IRA retirement plan, as contributions are allowable based on your taxable income. How to claim the Foreign Earned Income Exclusion Once you have established that both you and your income qualify, to claim the Foreign Earned Income Exclusion you have to file IRS Form 2555 at the same time as your Form 1040 every year (i.e. the same filing deadlines and extension rules apply). Filing IRS Form 2555 instructions Form 2555 is a relatively short 3-page form, however most expats seek assistance from an expat tax specialist to ensure that they get planning advice as well as fill in the form correctly. Part I requests details about you and your employer. You then fill in either Part II or Part III, depending whether you are using the Bona Fide Residence Test (Part II) or the Physical Presence Test (Part III). In Part IV, you enter details about your foreign earned income amounts and your expenses. These figures correspond with those you put on Form 1040. Part V is for if you are also claiming the Foreign Housing Exclusion or Deduction (more details about this are below). If you are, enter further details in Part VI. The final three parts, VII, VIII, and IX, are for the exclusion calculations, using the figures from the previous sections. What if the FEIE isn’t enough? If you are claiming the Foreign Earned Income Exclusion, are renting your home abroad, and your income exceeds the FEIE maximum threshold, you can also claim the Foreign Housing Exclusion (or the Foreign Housing Deduction if you’re self-employed) to exclude more of your income from US tax. The FHE is also claimed using Form 2555. The Foreign Housing Exclusion (or Deduction) lets you exclude a proportion of your unavoidable housing expenses, such as rent and utilities. The IRS uses a complex formula to determine the amount of your housing expenses that you can exclude (or deduct), which also takes into account where you live, as rental costs are higher in some places than others. There are other credits and exclusions available to expats too, depending on your circumstances, so always discuss your options with your expat tax professional. Foreign Earned Income Exclusion FAQs Can expats reduce US self-employment taxes with the FEIE? No, the FEIE just lets you reduce US federal income tax, so self-employed expats are still liable to pay US self-employment taxes if they claim the FEIE. These may however be covered by a double taxation agreement between the US and the host country where the expat lives. Can expats claim both FEIE and the US Foreign Tax Credit? In theory yes, however expats can’t apply the FEIE and the FTC to the same income. So for example if you live and are employed in a foreign country and you also receive rental income from an apartment in the US that is also taxed in the country where you live, it could make sense to claim both and apply the FEIE to your employment income and the FTC to your rental income. Whether this would be the best approach would depend on the specific details of your situation, though. Can expat parents claim the FEIE and the US Child Tax Credit? No, expat parents can’t normally claim the FEIE and the refundable part of the US Child Tax Credit, so it often makes more sense for expat parents to claim the Foreign Tax Credit rather than the FEIE, assuming doing so will also reduce their US tax bill to zero. If you have any questions, don't hesitate to contact us. DUNHILL FINANCIAL, LLC IS A REGISTERED INVESTMENT ADVISER. INFORMATION PRESENTED IS FOR EDUCATIONAL PURPOSES ONLY AND DOES NOT INTEND TO MAKE AN OFFER OR SOLICITATION FOR THE SALE OR PURCHASE OF ANY SPECIFIC SECURITIES, INVESTMENTS, OR INVESTMENT STRATEGIES. INVESTMENTS INVOLVE RISK AND UNLESS OTHERWISE STATED, ARE NOT GUARANTEED. BE SURE TO FIRST CONSULT WITH A QUALIFIED FINANCIAL ADVISER AND/OR TAX PROFESSIONAL BEFORE IMPLEMENTING ANY STRATEGY DISCUSSED HEREIN. Copyright © 2023 Dunhill Financial. All rights reserved.

The IRS adjusts various tax exemptions and thresholds each year to ensure that they keep up with inflation. For example, expats should note that the Foreign Earned Income Exclusion limit has risen to £112,000 in 2022 (so for filing in 2023), and will rise to £120,000 in 2023 for filing in 2024. They have also adjusted the gift tax annual exclusion and the lifetime exemption/estate tax exemption, and there are several ways to make use of the new higher thresholds, according to Dunhill Financial. The annual gift tax exclusion per donee has been raised to $17,000 per person for 2023, the company writes. That’s up from $16,000 for 2022 and $15,000 for the years 2018 to 2021. The lifetime gift tax and estate tax exemption, meanwhile, has increased to $12.92 million for 2023. That’s up from $12.06 million for 2022 and $11.7 million for 2021. If Congress doesn’t take action however, in 2026 the lifetime exemption will revert to 2011’s original $5 million (adjusted for inflation). This is because it was raised in 2017 with a ‘sunset clause’ in 2025. So for anyone who dies in 2023, their estate won’t be taxed if its total value is less than $12.92 million. With the possible lower rate coming in just a couple of years' time, even if your total assets (including property) are worth less than this amount, it may be advantageous to think about gifting over the next couple of years, potentially into trust or company structures, to avoid possible future taxes. In the meantime, several planning strategies are available to take advantage of the higher thresholds.“A benefit to using the exemption during lifetime is that any appreciation of the asset given away is also outside of the individual’s estate for estate tax purposes at death,” whether the gift is made either to an individual or to a trust, according to Dunhill Financial. Expats can also tap the spousal lifetime access trust, popular for married couples because grantors can keep an indirect benefit from the irrevocable trust, allowing for distributions from the trust to provide income for the couple, the company says. Moreover, in such trusts the grantor pays taxes personally on behalf of the trust, which lets the trust grow without incurring the income tax. Other expats may be better served by a descendants trust, in which the grantor’s spouse isn’t a beneficiary, the company says. Such trusts can be set up to either have the grantor or the trust responsible for the income tax and are “very flexible” overall because they allow the grantor to designate the assets according to their wishes. Expats could take advantage of the higher exemption by tapping life insurance for offsetting state or federal estate taxes that could be due upon their death, including through the use of irrevocable life insurance trusts and second-to-die policies. If you need assistance with your long term financial planning including estate tax planning, don’t hesitate to get in touch. If you have any questions, don't hesitate to contact us. DUNHILL FINANCIAL, LLC IS A REGISTERED INVESTMENT ADVISER. INFORMATION PRESENTED IS FOR EDUCATIONAL PURPOSES ONLY AND DOES NOT INTEND TO MAKE AN OFFER OR SOLICITATION FOR THE SALE OR PURCHASE OF ANY SPECIFIC SECURITIES, INVESTMENTS, OR INVESTMENT STRATEGIES. INVESTMENTS INVOLVE RISK AND UNLESS OTHERWISE STATED, ARE NOT GUARANTEED. BE SURE TO FIRST CONSULT WITH A QUALIFIED FINANCIAL ADVISER AND/OR TAX PROFESSIONAL BEFORE IMPLEMENTING ANY STRATEGY DISCUSSED HEREIN. Copyright © 2023 Dunhill Financial. All rights reserved.

No, there are more important economic indicators and factors to consider. Eggs are a staple food item in households around the world, providing a rich source of protein and nutrients for a relatively low cost. However, the cost of eggs has recently skyrocketed, leaving many consumers struggling to keep up with the rising prices. In fact, according to data from the Bureau of Labor Statistics, the cost of eggs in the US has risen more than any other food item in the past year. Last year, the average price for a dozen large Grade A eggs in the U.S. was $1.93 in January. By December, the price had skyrocketed to $4.25. Reasons for the high cost of eggs There are several factors contributing to the high cost of eggs. One of the main drivers of this increase is the widespread avian influenza outbreaks in recent years. Avian influenza, or bird flu, is a highly contagious virus that affects birds, and it has caused widespread damage to poultry populations worldwide. This has led to a significant decrease in egg production, driving up the cost of eggs as supply struggles to keep up with demand. Another factor is the increasing demand for cage-free and organic eggs. Consumers are becoming increasingly concerned with animal welfare and are demanding eggs from chickens that are not confined to cages. As a result, many egg producers have switched to cage-free production methods, which are more labor-intensive and result in higher production costs. The cost of feed for chickens is also a significant factor in the high cost of eggs. Feed accounts for a large portion of the cost of egg production, and with the recent rise in grain prices, egg producers are struggling to keep up with the increasing cost of feed. This has resulted in higher costs for eggs, which are passed on to consumers in the form of higher prices. Additionally, the rise in egg prices can be attributed to increased demand for eggs as a source of protein. As consumers become more health-conscious and focus on eating a diet rich in protein, the demand for eggs has skyrocketed. This has put further pressure on egg producers to meet the growing demand, resulting in even higher prices for consumers. Cost of eggs indicative of the economy? The cost of eggs can reflect certain aspects of our economy, but it is not a comprehensive indicator of its overall state, because it is just one of thousands of factors that drives our economy. Additionally, while the cost of eggs can reflect local and regional economic conditions, it may not always accurately reflect the national economy. The cost of eggs can vary significantly across different regions, depending on local conditions such as supply, demand, and transportation costs. More important factors to watch The overall state of the economy is influenced by a complex and interrelated set of factors, and the more influential factors include: • Gross Domestic Product; • Inflation; • Employment Figures; • Wages; • Industrial Production; • Home Sales; • Home Building; • Consumer Spending; • Manufacturing Demand; • Goods and Services Deficit; • Retail Sales; and • Government policies, among others. While the cost of eggs can provide some insight into the US national economy, it is not a comprehensive indicator of its overall state or a harbinger of a pending recession. There are just too many more important economic indicators and factors to consider. If you have any questions, don't hesitate to contact us. DUNHILL FINANCIAL, LLC IS A REGISTERED INVESTMENT ADVISER. INFORMATION PRESENTED IS FOR EDUCATIONAL PURPOSES ONLY AND DOES NOT INTEND TO MAKE AN OFFER OR SOLICITATION FOR THE SALE OR PURCHASE OF ANY SPECIFIC SECURITIES, INVESTMENTS, OR INVESTMENT STRATEGIES. INVESTMENTS INVOLVE RISK AND UNLESS OTHERWISE STATED, ARE NOT GUARANTEED. BE SURE TO FIRST CONSULT WITH A QUALIFIED FINANCIAL ADVISER AND/OR TAX PROFESSIONAL BEFORE IMPLEMENTING ANY STRATEGY DISCUSSED HEREIN. Copyright © 2023 FMeX. All rights reserved. Distributed by Financial Media Exchange.

"A fine is a tax for doing something wrong. A tax is a fine for doing something right." - Anonymous Expats have to file US federal taxes from overseas, but what about state taxes? The answer isn’t a straight yes or no unfortunately, as it depends on several factors that we’ll explore in this article, but state taxes should be part of your research as you plan your move abroad. In this article, you’ll learn about: • Which expats have to file state taxes? • How is state residency defined for expats? • States where it doesn’t matter • States where you’ll need to do something • Sticky States • Preparing to minimize state taxes when you move abroad Which expats have to file state taxes? Whether or not you are required to file state taxes as an expat depends on in which state you resided permanently before moving abroad. To put it another way, the rules of the state that you were considered a resident of will decide your obligations regarding state taxes once you live overseas. If that state still considers you as a resident, then you have to file state taxes from abroad. But how will you check your residency status according to your last state? How is state residency defined for expats? Every state has its own qualification criteria. Most states look at how long you intend to be abroad for (or whether you intend to return to live in the state), however some look at the ties you have maintained in the state instead. Here is a list of ties that a state might make you liable to state taxes from abroad: Car registration State id or a driving license Voter registered Owning a property in the state Continuing to pay bill and services in the state Having dependents in the state Having a mailing address in the state (P.O. box or a relative’s house) Intending to return to live in the state (e.g. if you’re abroad on a temporary work placement) Maintaining bank accounts in the state, or other financial accounts or assets Receiving income in the state (e.g. from rent, dividends, or if you perform services remotely) In some situations, you might be required to file state taxes for the income earned from the state even if you don’t meet the criteria of being a resident. As such, it’s important to dive into the specifics in the state where you were last resident, and if you are still confused about your status, consult an expat tax expert. What's the best state for expat taxes? On discovering that they would be liable to pay state taxes after they move abroad, some expats move state first to one with more lenient rules to save money in the long run, especially with exemptions such as the Foreign Earned Income Exclusion allowing expats to reduce their federal US tax bill but there being no such exemptions for state taxes. States where it doesn’t matter There are states which have no state income taxes. If you last lived in one of these states, you won’t owe any state tax from overseas, even if you retain ties or receive income in the state. These are: Alaska Florida Nevada South Dakota Texas Washington Wyoming Furthermore, there are two states that only charge tax on interest and dividends earned by residents, being: Tennessee New Hampshire States where you’ll need to do something For the majority of states, other than those with no income tax and ‘sticky’ states, once you let them know that you’re no longer living in the state, they will be happy to let you go. This can be complicated by receiving income in the state or maintaining ties in the state, so it’s important to understand the rules in the state where you last lived and how they apply to you. Sticky States ‘Sticky’ states are the ones that don’t like to let you go! To avoid paying state taxes in these states, you will have to demonstrate that you have relinquished your ties to the state and you don’t intend to return. These states are: California New Mexico South Carolina Virginia New York Let’s assume that you were a resident of California, which is a sticky state. You then moved to France and now you want to assess your tax obligations. To not have any state tax liability at all, you will have to prove to the state of California that you will not be returning to the state. If you fail to do so, you will be liable to pay tax on your worldwide income. California also has a safe harbor exception. This means that you will be regarded as a non-resident if you have been out of the state for more than 546 days for employment-related reasons. If you can’t prove that you are not going to return, then you may well have to file a state tax return along with your federal tax returns every year from abroad. The residency definition in these states is comparatively very stringent, and if you fail to prove that you are not coming back, you will pay taxes on your worldwide income, irrespective whether you lived in the state during the year or not. Preparing to minimize state taxes when you move abroad Before moving, to reduce your state tax obligation, the first step is to research the rules of the state you live in to see whether you may have to file state taxes after you move. If you think you may have to pay state taxes from abroad, if you live in a ‘sticky’ state for example, you should seek professional advice from an accountant who has experience with expats. Most US CPAs won’t have this experience, so just asking your normal tax professional isn’t normally the best option. If you live in a ‘sticky’ state, and if you have time and it’s possible logistically for you, you might consider moving to a tax-free state such as Alaska, Florida, or Nevada. Make sure that you meet the criteria for becoming a resident in these states before moving abroad though, as well as meeting the criteria for not being a resident in your previous state. The best advice though is to always consult expat specialist tax and financial advisors, both before and after you move, to ensure that you are minimizing your state, federal and foreign tax liability. If you have any questions, don't hesitate to contact us. DUNHILL FINANCIAL, LLC IS A REGISTERED INVESTMENT ADVISER. INFORMATION PRESENTED IS FOR EDUCATIONAL PURPOSES ONLY AND DOES NOT INTEND TO MAKE AN OFFER OR SOLICITATION FOR THE SALE OR PURCHASE OF ANY SPECIFIC SECURITIES, INVESTMENTS, OR INVESTMENT STRATEGIES. INVESTMENTS INVOLVE RISK AND UNLESS OTHERWISE STATED, ARE NOT GUARANTEED. BE SURE TO FIRST CONSULT WITH A QUALIFIED FINANCIAL ADVISER AND/OR TAX PROFESSIONAL BEFORE IMPLEMENTING ANY STRATEGY DISCUSSED HEREIN. Copyright © 2023 Dunhill Financial. All rights reserved.

If you decide to move back to the US after living abroad, you may have bank accounts, investments, and pensions registered abroad as well as in the US. You may also own real estate abroad. Before moving back to the US, you’ll need to think about whether it’s in your best interest to close your foreign accounts and move your assets to the US, taking into account tax implications and currency conversion costs. In this article, you’ll learn about: • Should you liquidate your foreign investments and pensions? • Tax considerations for returning Americans • Currency considerations for returning Americans • Moving back to the US checklist Should you liquidate your foreign investments and pensions? Many returning Americans wonder whether they should liquidate their foreign investments and pensions when they move back to the States. While having financial accounts and assets overseas means still FBAR and FATCA forms, it can sometimes still be in your best interest to leave them abroad after you move back. For example, you may wish to continue periodically spending time in the country where you’ve been living, or return to live there in the future, in which case retaining property, bank and investment accounts could make sense. Or, it may be that you want to avoid paying capital gains tax in the foreign country by liquidating all your foreign investments at once, and so decide to sell them slowly over a number of years to make use of an annual exemption. Or, you may feel that because the dollar is strong at the moment, it’s not a good time to sell foreign assets and buy US assets, and so instead choose to wait a few years until the dollar weakens. An important factor when deciding whether to transfer foreign pensions to the US is whether there’s a US tax treaty with the country where you’ve been living that allows you to transfer foreign pensions into US pension plans without losing the tax advantages. Some expats returning to live in the US on the other hand are motivated by the idea of keeping everything tidy and consolidating their pensions and investments in one place. There is no ‘one size fits all’ answer to this question, and what is best for you will depend on your circumstances. Tax considerations for returning Americans As you’re no doubt aware, the US requires all US citizens to file US taxes, even while living abroad. There are also other US reporting requirements for US citizens living abroad relating to owning foreign-registered financial accounts and assets. While most Americans living abroad don’t pay any US taxes because they claim either the US Foreign Tax Credit or the Foreign Earned Income Exclusion when they file, it’s important to ensure you’re up to date with your US filing and reporting before you move back to the States to avoid unexpected penalties and fines for missed filing. Another significant tax question when moving back to the US is whether you’ll be liable to pay any additional tax if you liquidate assets and transfer them back to the US. The answer to this depends on the tax rules in the country where you’ve been living and the value of the assets you sell. From a US perspective, capital gains on assets sold that were owned for less than a year is considered income and taxed along with your other income at standard rates. Gains on the sales of assets that were owned more that a year are taxed at 15%, or 20% over a certain value. Note that if you sell your primary home, there’s a $250,000 US capital gains tax exemption if you’re a single filer (or married filing separately), or $500,000 if you file jointly. Note also that if you are selling assets that realized a capital gain to transfer the proceeds back to the US, if you also liquidate loss-making assets in the same year, you can offset the losses to reduce your capital gains tax bill. If you have to pay foreign capital gains taxes on assets you sell, you can claim US tax credits based on the amount of foreign tax you’ve paid to avoid double taxation on the same gains. Once you’ve sold your foreign assets, there’s no US tax triggered by transferring money internationally. Currency considerations for returning Americans The two major currency considerations relating to transferring investments to the US when you move back are firstly whether it’s a good time in terms of the currency conversion rate, and secondly how to minimize costs when you make the transfer (whether now or in the future). Your financial advisor may have a view on whether it’s a good time in terms of the current exchange rate, however no one knows for sure how currencies will move in the near future. A good currency exchange company will also be able to help you either lock in a current rate, or book a transfer when the exchange rate hits a preferable target rate in the future. In terms of minimizing transfer costs, you can save a significant amount of money by using a specialist international currency broker instead of making bank to bank transfers. Moving back to the US checklist 1 - Consult your expat financial advisor and expat tax advisor, ideally in tandem, to make a plan regarding your foreign registered assets and whether to transfer them back to the US. They will also help you execute your plan. 2 - Ensure that your tax affairs are in order both in the US and the country where you’ve been living,. 3 - Start preparing for the move - where will you live and do you need to find a new job? Do you already have US bank and brokerage accounts, or do you need to open new ones? Will you need to purchase a car? Do you need to find new schools for your kids? You can organize most of these from abroad. 4 - Let the relevant authorities and companies abroad know that you’ll be moving, such as the tax authorities, financial institutions, and utility companies. 5 - Get quotes for moving your possessions, or organize selling those you won’t be taking back, such as cars, for example. 6 - You may need to organize new health insurance in the US, and you may need to arrange for your foreign provider to transfer or provide you with your health records. 7 - Book your flights! If you have any questions, don't hesitate to contact us. DUNHILL FINANCIAL, LLC IS A REGISTERED INVESTMENT ADVISER. INFORMATION PRESENTED IS FOR EDUCATIONAL PURPOSES ONLY AND DOES NOT INTEND TO MAKE AN OFFER OR SOLICITATION FOR THE SALE OR PURCHASE OF ANY SPECIFIC SECURITIES, INVESTMENTS, OR INVESTMENT STRATEGIES. INVESTMENTS INVOLVE RISK AND UNLESS OTHERWISE STATED, ARE NOT GUARANTEED. BE SURE TO FIRST CONSULT WITH A QUALIFIED FINANCIAL ADVISER AND/OR TAX PROFESSIONAL BEFORE IMPLEMENTING ANY STRATEGY DISCUSSED HEREIN. Copyright © 2023 Dunhill Financial. All rights reserved.

“Inflation is taxation without legislation.” - Milton Friedman 2022 saw inflation dominate the economic news, with some of the highest inflation rates seen for decades in the US and many other countries. Inflation isn’t an academic economic phenomenon, it affects us all, from the prices we pay in shops to the interest rates we pay on mortgages and loans, and investments, too. Expats will have experienced fast rising prices and another result of inflation is that a much stronger dollar may have affected their cross-border investments or money transfers. In this article, we’ll look at: • What is inflation? • What causes inflation? • How does inflation affect investments? • Inflation in 2022 and 2023 • Is inflation always bad? What is inflation? Inflation is defined as a long-term increase in the prices of goods that reduces the purchasing power of money. Between 1960 and 2021, the average annual inflation rate in the US was 3.8%. In June 2022, it reached 9%. Indexes like the Consumer Price Index and Wholesale Price Index reflect the inflation rate over time. Inflation directly impacts the cost of living, which in turn slows economic growth. According to economists' general understanding, prolonged inflation happens when a country's money supply expands faster than its economy grows. Thus, inflation levels can theoretically be controlled by increasing or decreasing the money supply in an economy. What causes inflation? Several factors can cause inflation. Here are a few examples: Cost-push inflation is a rise in the prices of goods and services due to the increase in prices of factors of production. This reduces the supply of goods, causing price increases. For example, when oil prices go up, it increases the general inflation rate because it is a significant factor in production of many goods, as well as transporting them (and transport in general). Demand-pull inflation is an increase in the price of goods and services due to increased demand. In this scenario, the aggregate demand in an economy is greater than the aggregate supply. Built-in inflation occurs when consumers anticipate that inflation will go up shortly. As a result, workers may demand more pay due to these common expectations. At the same time, higher earnings can boost goods demand, leading to higher prices. Money devaluation: Monetarists believe that as the supply of money increases in an economy due to the expansionary policy of central banks, its value goes down. When money's value declines, it loses some of its purchasing power, increasing the relative cost of goods. Measuring inflation There are different ways to measure inflation, but the most commonly used is the Consumer Price Index, which measures the increase in price of a ‘basket’ of essential goods and services including basic foods, gas and utilities. Another useful way to measure and compare inflation between countries is by using the Big Mac Index, which was originally introduced by The Economist magazine in 1986 to compare relative purchasing power between different countries based on just the price of a Big Mac in each country. The increase in the price of a Big Mac in each country is also a good indicator of inflation, though. How does inflation affect investments? Understanding the impact of inflation on investments is essential for expat investors, as the rate of inflation is a measure of how quickly an investment loses its real value over time. Thus, investors must ensure that their returns are higher or at least equal to the inflation rate to retain their value. Liquid assets are affected by inflation in the same ways as other types of investments, with the exception that the returns on liquid assets such as money are typically meagre compared to illiquid assets like shares and bonds. Liquid assets are, therefore, more susceptible to the damaging effects of inflation. As a result, higher inflation rates tend to result in people and corporations holding fewer liquid assets in the overall economy. Say you have $100 in your account. Your savings would increase to $105 if you earned a 5% interest rate. If inflation is 10% over the same period, an item previously priced at $100 will now cost $110. Despite the growth in your investments, you must spend more money because inflation has increased. Because the impact of inflation on illiquid assets is less than on liquid assets, people secure their savings by investing them in bonds and stocks. Inflation in 2022 and 2023 The global COVID-19 pandemic impacted economies negatively. The prolonged lockdowns reduced production and inhibited global freight transport. Businesses are currently attempting to resume normal operations or working to make up lost revenue. Because the pandemic reduced aggregate demand, there were many layoffs, which reduced disposable income. This spiral caused inflation to rise. In other words, the combination of high demand and inadequate supply following the pandemic has caused prices to soar. Economists aren’t all in agreement regarding the expected inflation rates in the coming months and years. Numerous analysts are confident that the current inflationary pressures will be short-lived and will soon subside. However, others are less optimistic, claiming that Americans—as well as people in the majority of the other developed economies—must adjust and be ready for higher inflation rates to become endemic. The more optimistic school of thought maintains that the current price hikes should be resolved as soon as supply chain constraints subside and the post-pandemic rise in demand to purchase items diminishes. The other school of thought believed that as slower-moving categories like rent join the trend of price hikes, the claim that price increases are only limited to industries impacted by pandemics is starting to falter. Furthermore, Russia’s invasion of Ukraine increased global oil prices, further increasing manufacture and transportation prices globally. Is inflation always bad? As long as it is kept under control, a little inflation is required to keep the economy expanding and generally regarded as healthy. This is because inflation reduces unemployment rates. However, if costs keep rising too quickly, it becomes a problem that needs to be addressed. Coupled with stagnant growth, it can lead to stagflation. Rapid inflation usually results in people cutting back on spending and eventually entering a phase that might lead to depression. There are both winners and losers when it comes to inflation. For example, people who have invested in assets such as gold and cryptocurrencies can benefit from inflation, as these types of assets can often spike in value during times of high inflation. There is also often a higher demand for physical assets, such as art and jewellery in times of inflation. Conversely, some of the assets that do badly in times of high inflation include cash (in savings accounts for example, as when prices increase, money loses value, reducing the savings' actual worth), and long-term bonds. Borrowers on variable rates also suffer, as central banks hike interest rates to combat inflation and retail banks follow suit by increasing the borrowing rate. As a result, homeowners with variable mortgage rates may experience considerable increases in their monthly mortgage payments. High and erratic inflation breeds uncertainty for customers, banks, and businesses alike. There needs to be more investment, which results in slower economic expansion and fewer job opportunities. Therefore, rising inflation over the long run is linked to worsening economic prospects. If you have any questions, don't hesitate to contact us. DUNHILL FINANCIAL, LLC IS A REGISTERED INVESTMENT ADVISER. INFORMATION PRESENTED IS FOR EDUCATIONAL PURPOSES ONLY AND DOES NOT INTEND TO MAKE AN OFFER OR SOLICITATION FOR THE SALE OR PURCHASE OF ANY SPECIFIC SECURITIES, INVESTMENTS, OR INVESTMENT STRATEGIES. INVESTMENTS INVOLVE RISK AND UNLESS OTHERWISE STATED, ARE NOT GUARANTEED. BE SURE TO FIRST CONSULT WITH A QUALIFIED FINANCIAL ADVISER AND/OR TAX PROFESSIONAL BEFORE IMPLEMENTING ANY STRATEGY DISCUSSED HEREIN. Copyright © 2023 Dunhill Financial. All rights reserved.

We’re all well aware that we should save money for retirement, but many of us don’t know what to do or how it works. Don’t worry, you aren’t alone! This simple guide will help you understand the power of compound interest and how you can get started using it to your advantage today! What is compound interest? Compound interest occurs when the interest that accrues to an amount of money in turn accrues interest itself. Say a person opens a retirement account when they are 25 and saves $5,000 a year. Without compound interest, they will save $200,000 by the time they’re 65. With a compound interest rate at about 6% or higher, they’ll be a millionaire by the time they’re 65. That’s the power of compound interest! How does it work? All the glory of compound interest takes place in a retirement account, most commonly a 401(k) or an individual retirement account (IRA). Each type of retirement account comes with an interest rate (the average being between 8-10%) so you can calculate how much money will accumulate by the time you retire based on your age and annual savings. The most important factor to leveraging the power of compound interest is to begin as early as possible. It’s never too late to start, but the rate of return is the highest if you begin a retirement savings account in your 20’s. The longer you wait to start saving, the less time you have to accrue interest and build your savings. For the visual people out there, check out these charts that illustrate how your age affects your saving potential. How do I get started? All you have to do is open up a retirement account and start adding to your savings annually! You’ll need to start by choosing which type of account to open: 401(k): For most people, the best place to start is with the 401(k) program at work. This is a particularly enticing option if your employer matches a portion of your contribution (free money!). This is the easiest and most common way to begin saving for retirement, and all you have to do is sign up! Your employer does the rest and simply transfers money from your paycheck to your 401(k) account each pay period. IRA’s: If you are self-employed or your employer doesn’t offer a 401(k) program, then you’ll have to open up an individual retirement account. IRA’s are a little more complicated than 401(k) programs since you have to choose which plan is right for you and do a little more legwork, but they often come with better tax savings and give you the power to shop for the best interest rate. There are different types of IRA’s (traditional and Roth for individuals, SEP and Simple for small business owners). You’ll need to decide which type of IRA is the right fit for you before you can start shopping for an account provider. In summary, compound interest is simple, but important. Start saving as early as possible to see maximum benefits. We would be happy to help you get started, just email us on info@dunhillfinancial.com. DUNHILL FINANCIAL, LLC IS A REGISTERED INVESTMENT ADVISER. INFORMATION PRESENTED IS FOR EDUCATIONAL PURPOSES ONLY AND DOES NOT INTEND TO MAKE AN OFFER OR SOLICITATION FOR THE SALE OR PURCHASE OF ANY SPECIFIC SECURITIES, INVESTMENTS, OR INVESTMENT STRATEGIES. INVESTMENTS INVOLVE RISK AND UNLESS OTHERWISE STATED, ARE NOT GUARANTEED. BE SURE TO FIRST CONSULT WITH A QUALIFIED FINANCIAL ADVISER AND/OR TAX PROFESSIONAL BEFORE IMPLEMENTING ANY STRATEGY DISCUSSED HEREIN. Copyright © 2022 Dunhill Financial. All rights reserved.

Dunhill Financial is proud to participate in an online event on financial planning for European expats in the US taking place on Wednesday October 26th at 6pm UK time / 1pm Eastern Time. Financial planning for expats living in America can be confusing, navigating different retirement plans, investment types, and with cross-border currency considerations, too. The topics covered in the event will include: Retirement planning: as an expat, should I utilize US retirement plans (IRAs, 401ks etc)? Investing: how should I structure my investments and should I take currencies into consideration when investing as an expat? Currencies: how can I mitigate volatility and minimize costs in currency exchange and transfer? The event is free to attend, and you can register at this link: https://www.eventbrite.com/e/expats-in-america-financial-planning-pitfalls-and-solutions-tickets-412800767207 The event will last an hour, including a 15 minute Q&A so you can put your questions to the experts. Drew Waterbury, Ocean Advisors Drew is a Certified Financial Planner with over 30 years of experience in financial services. He previously worked for New York Stock Exchange member firms before founding Ocean Advisors, LLC to help families who wish to create generational wealth through financial planning and investment strategies. Brian Dunhill, Dunhill Financial Brian is a Financial Planner with a core emphasis on concentrated positions and retirement planning for expats. Previously, he worked for prestigious Wall Street firms including UBS, Lehman Brothers, and A.G. Edwards. Kelly Cutchin, Moneycorp Kelly joined Moneycorp based out of their Orlando Florida Office in 2006. In December 2012, she took on the role of Country Manager for Moneycorp's USA operations, leading a team of foreign exchange experts and working closely with the firm's global offices. Book your place today at the above link. DUNHILL FINANCIAL, LLC IS A REGISTERED INVESTMENT ADVISER. INFORMATION PRESENTED IS FOR EDUCATIONAL PURPOSES ONLY AND DOES NOT INTEND TO MAKE AN OFFER OR SOLICITATION FOR THE SALE OR PURCHASE OF ANY SPECIFIC SECURITIES, INVESTMENTS, OR INVESTMENT STRATEGIES. INVESTMENTS INVOLVE RISK AND UNLESS OTHERWISE STATED, ARE NOT GUARANTEED. BE SURE TO FIRST CONSULT WITH A QUALIFIED FINANCIAL ADVISER AND/OR TAX PROFESSIONAL BEFORE IMPLEMENTING ANY STRATEGY DISCUSSED HEREIN.

We all have social causes that we care about. But there can sometimes be divergence in the causes we care about and our investment decisions. This does not have to be the case. As investors, we can consider both financial return and social good, giving us a chance to support the causes we care about, while diversifying our investment portfolios. A Rich History Investing for social good has a rich history dating back thousands of years, as people have long invested based on their values. In the United States, this investment approach dates back to the mid-1700s, when the Quakers refused to invest in any aspect of the slave trade and avoided investing in companies involved in the liquor, tobacco or gambling industries - the so-called Sin Stocks. Fast forward to the 1980s, and shareholders, citing their opposition to apartheid-ruled South Africa, convinced U.S. companies to withdraw from South Africa, which fueled an international boycott that brought about change and helped lead to fair elections. One in Three Dollars Is ESG-managed Today By assessing potential investments using environmental, social and governance (ESG) criteria, along with financial performance metrics, investors can assign “points” to companies whose practices align with their values. More points translate to a higher weighting in the target portfolio. The ESG market is huge in the U.S. and around the world. According to the Forum for Sustainable and Responsible Investment, one out of every three dollars under professional management in the United States is involved in ESG. The ESG Criteria In general, socially conscious investors seek to encourage corporate practices that promote religious beliefs, environmental stewardship, consumer protection, human rights or diversity. Money managers are incorporating ESG criteria into their investment analysis and decision-making. ESG criteria can also be used to limit investment in areas that conflict with the investor's values. Different Terminology, Same Idea As you can surmise, there are as many approaches to Socially Responsible Investing as there are SRI investors, who may refer to SRI as: #CommunityInvesting #EthicalInvesting #GreenInvesting #ImpactInvesting #MissionRelatedInvesting #SustainableInvesting #ValuesBasedInvesting Things to Think About Ruling out companies for practices that you disagree with does occasionally result in diminished profits. In fact, a good portfolio allocation will warn investors that their environmental and social screens might result in leaving money on the table. Further, as in all investing, having a broad diversification of your investment portfolio is always important. For example, investors who see global climate change as a significant business and investment risk can consider investing as part of the portfolio in environmentally conscious companies. Investing according to your conscience can turn your portfolio into a powerful agent for change you believe in. At Dunhill Financial we believe in hyper customized portfolios for all, utilizing our wealth of experience and technology we can help your investments align with your views on ESG and other thematic areas without derailing your overall financial plan. If you are interested in socially responsible investing or hyper customized portfolios get in touch with our expert advisors to see how we can help you unlock your finances. #ESG #SociallyResponsibleInvesting #FinancialPlanning #Investments #Thematic #DisruptiveTechnology DUNHILL FINANCIAL, LLC IS A REGISTERED INVESTMENT ADVISER. INFORMATION PRESENTED IS FOR EDUCATIONAL PURPOSES ONLY AND DOES NOT INTEND TO MAKE AN OFFER OR SOLICITATION FOR THE SALE OR PURCHASE OF ANY SPECIFIC SECURITIES, INVESTMENTS, OR INVESTMENT STRATEGIES. INVESTMENTS INVOLVE RISK AND UNLESS OTHERWISE STATED, ARE NOT GUARANTEED. BE SURE TO FIRST CONSULT WITH A QUALIFIED FINANCIAL ADVISER AND/OR TAX PROFESSIONAL BEFORE IMPLEMENTING ANY STRATEGY DISCUSSED HEREIN. Copyright © 2022 FMeX. All rights reserved. Distributed by Financial Media Exchange.

When your tax refund arrives from Uncle Sam, it can be tempting to spend it immediately. But there are ways that you can use your refund to your advantage. 1. Build Your Emergency Fund If your emergency fund is low, consider using your tax refund to beef it up. Most experts recommend having at least three to six months of expenses saved. But over half of Americans have less than three months in emergency savings, while a quarter doesn’t have an emergency fund at all. A normal savings account can suffice for keeping your emergency savings safe, but a certificate of deposit (CD) can also be a good option if you’re searching for a higher interest rate savings vehicle and don’t need the money prior to the CD’s maturity date. 2. Contribute to Retirement Putting your tax refund into an individual retirement fund is a good way to build for your future. Consider contributing to either a Roth or Traditional individual retirement account (IRA). For a traditional IRA, your contributions are deducted from your income and then taxed when the money is withdrawn. While a Roth IRA doesn’t allow you to deduct contributions from your income, you can withdraw the funds tax-free. Check the income phase-outs to make sure you qualify. This supplement to your normal retirement savings may come in handy. Most experts recommend having ten times your salary saved for retirement by age 67. 3. Pay Down Credit Card Debt If you have debt, it may be wise to pay it down with some help from your tax refund—especially if you have credit card debt. Credit cards usually have high interest rates and can keep you in debt for years if you’re only making the minimum payment. Unlike other types of debt, such as a mortgage or student loan debt, credit card debt is considered “bad debt” because it isn’t used to pay for appreciating assets. 4. Invest in Education Putting extra funds toward education—whether you’re saving for your child or your own—is always a good use of extra cash because it’s an investment in human capital. Education has been shown to improve salary potential, social mobility, sense of fulfillment, and even health. If your return goes into a college savings vehicle, you may be able to reap some tax benefits as well. 5. Increase Your Home Value If you have adequate emergency and retirement savings and aren’t carrying any credit card debt, use your tax refund to invest in your home. Consider funding a renovation project that will increase the value of your home. If you don’t plan on selling any time soon, focus on changes that improve your family’s overall quality of life. 6. Give to Charity Putting your tax refund behind a cause that’s close to your heart is emotionally rewarding. It also comes with the added possibility of tax benefits, depending on how you choose to give. Keep your giving receipt if you plan to itemize next year. You may want to look at donor advised funds (DAFs) and other vehicles to maximise your philanthropy efforts whilst optimizing your tax situation. Planning ahead is key, get in touch with our expert financial advisors to see how they can help you with your financial plan. #TaxReturn #IRS #FinancialPlanning #TaxRefund DUNHILL FINANCIAL, LLC IS A REGISTERED INVESTMENT ADVISER. INFORMATION PRESENTED IS FOR EDUCATIONAL PURPOSES ONLY AND DOES NOT INTEND TO MAKE AN OFFER OR SOLICITATION FOR THE SALE OR PURCHASE OF ANY SPECIFIC SECURITIES, INVESTMENTS, OR INVESTMENT STRATEGIES. INVESTMENTS INVOLVE RISK AND UNLESS OTHERWISE STATED, ARE NOT GUARANTEED. BE SURE TO FIRST CONSULT WITH A QUALIFIED FINANCIAL ADVISER AND/OR TAX PROFESSIONAL BEFORE IMPLEMENTING ANY STRATEGY DISCUSSED HEREIN. Copyright © 2022 FMeX. All rights reserved. Distributed by Financial Media Exchange.