CX and Taxes

[SaifAir]

Can anyone tell what kind of tax reporting CX does? If you are based in North America, Canada or US it is my understanding that you are on a pay rate based on that country's currency. However that amount is deposited into you HK bank is at the current exchange rate in HK $. If you live in the US do they do any reporting to the IRS? What are you responsible to report to the IRS? How do you handle Soc Sec and Medicare?

I know that any taxes you pay to a foreign government are deductable $ for $ but if you earn say 100,000 USD and pay the HK 16% this could be a higher amount of $ paid vs your taxable income in the US after deductions.

Any insight on the norm on how to handle this or how people handle the IRS?

[jetset]

Long story and different for each individual and base area however:

You are paid in the currency of your base area in your account in HKG. i.e. USD if you are USAB (based in the US) NOT in HKD's.

For the US there is a tax agreement with HKG therefore you pay US taxes only so you wont pay more tax. That's my understanding (I am not USAB) from chatting to the US based guys but tax is usually an individual matter.

Good luck!

[baseddude]

For USAB, you're paid in USD. The company withholds Federal tax, but not state tax, social security, or medicare tax. You'll have to pay estimated state taxes.

In addition, you'll get a tax bill from Hong Kong. You have a couple of choices:

First, you can pay the HK tax, and get a rebate equal to that amount from the IRS. The tricky thing is, the HK tax year is not Jan-Dec. It's something like May-Apr.

The other choice is to avoid the HK tax by convincing them that you live in the U.S., work in the U.S., pay taxes in the U.S., and work for a Vancouver based company (USAB). Not everyone is successful in this regard. HOW you fill out your HK tax form evidently determines how successful you are.

baseddude

[SaifAir]

Thanks for the info, the big question my CPA had was if they provided a W2 it sounds like they do. At the end of the day it also sounds like there really is not tax hit beyond the normal USA taxes just more hoops to jump though.

[HeavyWrenchFlyer]

Regarding how to fill your tax form, how do you do that best?? I thought there would be a place on there where you could indicate that you're claiming exempt, but I don't see such box to tick on that form.

So just how do you convince them, and what's the procedure to claim exempt from HK taxes?

thanks