US Expat Taxes
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US Expat Taxes
If there is anyone out there who is a US citizen but based in HKG, I am interested in any helpful experiential information related to both US federal tax and state income tax (particularly in California). Here's what I surmise from research so far...
1. I will pay income tax (approx 15% on all CX pay after personal deductions)
2. I will then pay CA state income tax
3. I have to calculate US federal income tax but can take what was paid to HKG as a credit against this, and most likely will not owe anything.
Any comments are welcome. Feel free to PM me or you can e-mail to [email protected].
1. I will pay income tax (approx 15% on all CX pay after personal deductions)
2. I will then pay CA state income tax
3. I have to calculate US federal income tax but can take what was paid to HKG as a credit against this, and most likely will not owe anything.
Any comments are welcome. Feel free to PM me or you can e-mail to [email protected].
Last edited by bretofdfw; 8th Sep 2008 at 03:41.
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A few of us SOs are dealing with that for the first time too... apparently it's better to take $87500 (or whatever the exemption is, prorated from how long you've been here) from your total earnings, and calculate the tax owed from that. I still haven't figured it out (I deferred my 2007 taxes until January 31, 2009), and I hope to find someone at CX with some answers too....
Reference:
http://www.irs.gov/faqs/faq13-7.html
Reference:
http://www.irs.gov/faqs/faq13-7.html
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I have used Alice Cjhan for the past 10 years. She should have all the answers for you... Her office is conveniently located in Lai Kwai Fong.
[email protected]
[email protected]
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Typhoon...
Yeah, my first question as well. 
Apparently, California is a bit reluctant to give up its taxing authority over residents and even former ones. So even if I move to Hong Kong, unless I establish residency in another state they still take the approach you're theirs to tax. Fun system.
Apparently, California is a bit reluctant to give up its taxing authority over residents and even former ones. So even if I move to Hong Kong, unless I establish residency in another state they still take the approach you're theirs to tax. Fun system.
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Sidetrack question... For a CX FO based in the USA, how do you deal with HK taxes? Do you pay it and claim it against your US tax bill.... OR do you claim exemption from HK taxes and just pay US taxes.
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You can do either of those......I choose to pay the US and submit exemptions to HK......either way you'll pay the same amount, so I'd rather pay in the country I'm living in.
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1. Yes. If you tell the IRS you are a foreign resident you are entitled to a tax deduction of $87500. For example, if you make US$100,000, after your foreign earned income deduction of $87500 you will owe tax on $12500.
There are a handful of other things that will help you in addition to the foreign earned income deduction. You can deduct housing expenses (based on the city in which you live), you can deduct foreign taxes paid, etc.
2. Yes. CA sucks and is the only state in the US that will tax foreign income. But...there are loopholes as you have mentioned. Check out some other options. You can - under certain circumstances - sign forms stating that you won't return as a CA resident and then get out of paying state tax.
3. See answer to #1
IRS pub 514 is actually helpful unlike everything else the IRS writes. It will walk you through all the turns. Check it out here: http://www.irs.gov/pub/irs-pdf/p514.pdf
PS: (slightly off topic here) don't contribute to a Roth IRA this year or any year if you figure out that you don't owe tax as a US citizen living abroad. You will get a big fine if they ever audit you. The logic is that since you technically have no after tax income, you are barred from investing in tax protected retirement accounts.
There are a handful of other things that will help you in addition to the foreign earned income deduction. You can deduct housing expenses (based on the city in which you live), you can deduct foreign taxes paid, etc.
2. Yes. CA sucks and is the only state in the US that will tax foreign income. But...there are loopholes as you have mentioned. Check out some other options. You can - under certain circumstances - sign forms stating that you won't return as a CA resident and then get out of paying state tax.
3. See answer to #1
IRS pub 514 is actually helpful unlike everything else the IRS writes. It will walk you through all the turns. Check it out here: http://www.irs.gov/pub/irs-pdf/p514.pdf
PS: (slightly off topic here) don't contribute to a Roth IRA this year or any year if you figure out that you don't owe tax as a US citizen living abroad. You will get a big fine if they ever audit you. The logic is that since you technically have no after tax income, you are barred from investing in tax protected retirement accounts.
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TAXES!!!!!
You guys are complaining. I do not live in the US, I am not a US citizen and the services I performed were outside the US, but the company IS US. They f(((((( up the reporting and filed like they would for a US-based independent contractor. So now the IRS wants me to pay taxes on income from 2001 and 2002, plus, because I have a tax liability for those years, and didnīt file in 2003, 04 05...they have "calculated" an income for me for those years as well. I thought this was all corrected two years ago, but now they are there again with the same questions!!!!!
Talking to them is like talking to a wall... "I do not live in the US." But you did in 2001. "No, I did not. In fact, checking my pilot logbook, I was only in US airspace 22 days in all of 2001." That is not the information i have. "Well, you have my address wrong, you have my birthdate wrong, you have the wrong name for my wife, could it possibly be that your so-called information regarding my residence in 2001 is also wrong?" Well, if you are going to be abusive, I donīt have to talk to you...and she hung up the phone. I was keeping my voice as quiet and gentle as I could....
trying to explain...but it just didnīt fit her "information." Astounding!
Talking to them is like talking to a wall... "I do not live in the US." But you did in 2001. "No, I did not. In fact, checking my pilot logbook, I was only in US airspace 22 days in all of 2001." That is not the information i have. "Well, you have my address wrong, you have my birthdate wrong, you have the wrong name for my wife, could it possibly be that your so-called information regarding my residence in 2001 is also wrong?" Well, if you are going to be abusive, I donīt have to talk to you...and she hung up the phone. I was keeping my voice as quiet and gentle as I could....
trying to explain...but it just didnīt fit her "information." Astounding!
