US Taxes

[I'mbatman]

I did a search but couldn't get a really good answer.

What is the deal with taxes for us in the U.S.?
Pay HK 15%?
Pay HK nothing and pay in the U.S.?
Do I have to put aside for medicare, SS, etc?

Also, I've heard the pay during training is tax exempt. True or untrue?

Thanks
IB

[Rainwater]

You can pay HKG tax and claim a foreign tax credit on your US taxes. You do not pay into Social Security or medicare (ever) as you work for a foreign employer. If you go that route, claim many exemptions so that your witholdings are low. No need to withhold for 2 countries at once. Or, you can pay your appropriate US taxes (excluding SS/Medicare) through normal withholdings and claim an exemption to HKG taxes (when you receive your return) and pay them nothing. You are forced to have US taxes withheld from your salary, how much is up to how many exemptions you claim. Even if you are in HKG over 60 days, yet pay taxes to a foreign country (USA), you will only be assesed on the days over 60. Your standard HKG exemptions will nullify what they determine you owe. So, simply put, you don't owe them anything. As far as wages in training, that's up to you...........My .02 worth, pay the USA and claim the exemption. You will end up paying less in tax if you have a mortgage and at least one child. Talk to a good tax accountant who understands working for a foreign company and having a "work office in HKG". You have more deductions with regards to commuting if your "work office" is not in the USA(no company mailbox). No matter what, you will pay less tax than working for a US company. The downside, no contribution to your Social Security retirement payout. hope this helps.........

[thepotato232]

The downside, no contribution to your Social Security retirement payout.Funniest thing I've read all day. Oh, and thanks for all of the info! I'm sure this answered a lot of people's questions.

[I'mbatman]

Ok it sounds like I'll pay Federal tax here in the US and ask for exemption from paying in HK. I won't pay medicare and SS b/c I work for a foreign carrier.

The only thing I'm still not clear on is paying taxes on the pay during training. After 60 days in HK I have to pay? I've been told CX doesn't report ANY of it. True?

Or does it have to do with being an expat on a work visa?

Thanks