Could American in HKG help!
Could an American in HKG help!
Joined: Oct 2005
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From: U.S.
Once you are established in HKG for a full tax year, then you shouldn't have any problem with the Bona Fide test. You will have residence here, home here, bank account here, pay taxes here, etc. Now, try to figure out the international waters, days in the us, etc, that is the real fun....
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Joined: Oct 2005
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From: U.S.
No, it no longer applies, but you will have to pro-rate your deduction based on the amount of time spent in the US, over US territories, or international waters. Good luck with all of that, and go conservative.
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Joined: Apr 2008
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From: U.S.A.
I realize that this thread is somewhat dated now but I have a relevant question to follow up with the above statement. On average, what percentage of your total working time would you say is spent over international waters and the U.S. (or U.K. as the situation may be)? Would this work out (for tax purposes) to be about 50% of your income? More? Less?
Thread Starter
Joined: Jun 2007
Posts: 140
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From: HKG
Does "duty" scheduled through ANC, and back to HKG, count against the 330 days? Do any Americans on here have a good expat CPA you use in hkg? Really need some guidance, and recommendations. It seems to me that as an american, i will chew up my allowable days just with duty work, nevertheless any vacation time.
Does the 330/35 day thing apply still after you meet the Bona fide test?
Agg! help!
Does the 330/35 day thing apply still after you meet the Bona fide test?
Agg! help!
Joined: Nov 2005
Posts: 52
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From: Getting radiated at ABERI
The 330 days doesn't matter once you meet the bona fide residency test, so don't worry about that. The big issue though is the prorating. How much of your flight is spent over international waters (defined as more than 10 miles from a foreign country's shoreline)? For North American freight guys, I'd say that's a high percentage. That time and any time flying over the US can't be considered foreign-earned income.
It's a stupid system, especially if you're flying from HK to another non-US country because you still have to consider that non-foreign earned income.
As an SO, I requested a lot of Europe & NY/YYZ (lots of Canada & Russia time) trips. Add all of my ground duties in HK and I got about 75% foreign-earned and 25% int'l & US earned.
As an FO, it's a lot more foreign-earned. Phew.
It's a stupid system, especially if you're flying from HK to another non-US country because you still have to consider that non-foreign earned income.
As an SO, I requested a lot of Europe & NY/YYZ (lots of Canada & Russia time) trips. Add all of my ground duties in HK and I got about 75% foreign-earned and 25% int'l & US earned.
As an FO, it's a lot more foreign-earned. Phew.
Joined: Apr 2008
Posts: 40
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From: U.S.A.
Thats good information subwoofer! Thank you! I am just starting to learn some of the ins and outs of the tax system as an expat and it is making me extremely frustrated and irritated with the U.S. tax laws.
Out of curiousity, do you, or anyone else for that matter, know if there is an easy way for the IRS to fact check that 75% or is it simply your word?
Out of curiousity, do you, or anyone else for that matter, know if there is an easy way for the IRS to fact check that 75% or is it simply your word?
Joined: Nov 2005
Posts: 52
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From: Getting radiated at ABERI
Out of curiousity, do you, or anyone else for that matter, know if there is an easy way for the IRS to fact check that 75% or is it simply your word?
Joined: Nov 2005
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From: Getting radiated at ABERI
I used to use Turbotax my first year here, but I realized it's limited for this purpose and really not appropriate. Now I use a CPA who is an expat pilot working for Emirates. You can find him at AirlineCPA.com - AIRLINE CREW TAXES and PER DIEM. Good luck!
Joined: Jun 2009
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From: az
You should not be taxed for time spent over international waters if you are a bonafide resident of another country. However, if you use the 330 day test, you have to use the time over international waters in you daily count. Working in International waters is a term for oil rig workers; which might be where most of us should be! More money and more time off!
Joined: Mar 2009
Posts: 137
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From: Japan.....
Turbo tax
I've been using turbo tax for many years with no issues as long as you proceed slowly and read carefully. I used a CPA for a few years and when he got up to take a whiz, I glanced at his computer screen and he was using Turbo Tax and charging me 15,000 baht per..... I've been a bona fide resident for about 12 years and never run into a problem. With a family of 3 and no deductions except for the standard, I can make around 110K before I need to pull out the checkbook. More info at Internal Revenue Service (bona fide resident)
