FedEX HKG Ex-pat package is out, and boy is it funny...
Join Date: Jul 2003
Location: usa
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expat US housing tax
Numero Cruncho
I understand the US housing tax free allowance has changed due to the 2006 tax bill passed that
1: Index linked the salary exclusion (ie 83K plus for 07')
BUT
2: Capped the housing allowance exclusion to approx 27K ie:anything paid you in access of 27K is fully taxed by the US. The floor remains as you mentioned at 13K
So it looks to me like the full 82K CX housing allowance for US CX pilots is gonna hurt (unless you can somehow show it as rent/tdy or some other accountant magic trick)
The fed ex 20 odd K allowance would actually be ok from a tax perspective....its all madness and just gonna get worsre......tax wise....buy your roth IRA folks....
Cheers
Teedub
I understand the US housing tax free allowance has changed due to the 2006 tax bill passed that
1: Index linked the salary exclusion (ie 83K plus for 07')
BUT
2: Capped the housing allowance exclusion to approx 27K ie:anything paid you in access of 27K is fully taxed by the US. The floor remains as you mentioned at 13K
So it looks to me like the full 82K CX housing allowance for US CX pilots is gonna hurt (unless you can somehow show it as rent/tdy or some other accountant magic trick)
The fed ex 20 odd K allowance would actually be ok from a tax perspective....its all madness and just gonna get worsre......tax wise....buy your roth IRA folks....
Cheers
Teedub
Join Date: Oct 2006
Location: Hong Kong
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teedub
the salary exclusion was $82.4 in 2006 but I believe it is $85.7 in 2007.
The upper cap of $27K on housing exclusion is based on the 30% limit of salary exclusion HOWEVER it does not apply in 'high cost localitys' of which HKG is one. If you go to your IRS website and look up the information form on filling out Form 2555 on page 4 or 5 you will see housing upper limits for various cities around the world and HKGs is $114.3K USD.
So like I said, if you can get FedEx to up the housing deal a bit it wont cost you any tax. I may be telling you to suck eggs here but you do know that the housing exclusion can include most of your housing costs (including renting furniture!). Sorry if you already knew this!
By the way, the floor is not the same - it is actually 16% of the Foreign Income Exclusion amount ie 16% of $85.7K this year.
clear as mud!
the salary exclusion was $82.4 in 2006 but I believe it is $85.7 in 2007.
The upper cap of $27K on housing exclusion is based on the 30% limit of salary exclusion HOWEVER it does not apply in 'high cost localitys' of which HKG is one. If you go to your IRS website and look up the information form on filling out Form 2555 on page 4 or 5 you will see housing upper limits for various cities around the world and HKGs is $114.3K USD.
So like I said, if you can get FedEx to up the housing deal a bit it wont cost you any tax. I may be telling you to suck eggs here but you do know that the housing exclusion can include most of your housing costs (including renting furniture!). Sorry if you already knew this!
By the way, the floor is not the same - it is actually 16% of the Foreign Income Exclusion amount ie 16% of $85.7K this year.
clear as mud!
Numero Crunchero
I’m very impressed.
How did you become so knowledgeable about the Seppo tax system? I know Zippo about it even though I should considering my circumstances and background.
I’m very impressed.
How did you become so knowledgeable about the Seppo tax system? I know Zippo about it even though I should considering my circumstances and background.
Thread Starter
Join Date: Jul 2005
Location: HKG / BKK
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Regardless of the how the US taxes are handled, our EX-Pat "Package" (HAH!) is a freaking joke.
It's going to be funny with FedEX pilots living in cardboard boxes and child-size studios along side of Cathay and Dragon Air guys who actually live in houses with running water and ovens.
It's going to be funny with FedEX pilots living in cardboard boxes and child-size studios along side of Cathay and Dragon Air guys who actually live in houses with running water and ovens.
