Questions about paying US taxes while working for EY with a Residence Visa
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Questions about paying US taxes while working for EY with a Residence Visa
Hello all,
I was curious if I will have to pay US taxes while working in the UAE for EY with a Residence Visa?
Thanks..
I was curious if I will have to pay US taxes while working in the UAE for EY with a Residence Visa?
Thanks..
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Uncle sam wants YOU
Take proper advice, but here is my understanding:
There are only two countries in the world that pursue you wherever you live on the planet to file a tax return in your home country. Sadly, one is the USA and the other, I believe, is Australia.
This means you physically have to continue to file, but the if your local wage is equivalent to less than a certain threshold (Used to be $75,000...probably higher now) then you pay nothing on that amount. Anything above that is taxable in the US, the amount depending on how much you have paid in your new country. Guess what? You will have paid zilch in the UAE so Uncle Sam will have his hand out.
OK, now everyone can tell me I am wrong.
There are only two countries in the world that pursue you wherever you live on the planet to file a tax return in your home country. Sadly, one is the USA and the other, I believe, is Australia.
This means you physically have to continue to file, but the if your local wage is equivalent to less than a certain threshold (Used to be $75,000...probably higher now) then you pay nothing on that amount. Anything above that is taxable in the US, the amount depending on how much you have paid in your new country. Guess what? You will have paid zilch in the UAE so Uncle Sam will have his hand out.
OK, now everyone can tell me I am wrong.
All you need to know. Yes you pay tax even if you are with EY.
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Up to $91,400 for 2009, plus you still get your standard deductions.
To claim the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction, you must have foreign earned income, your tax home must be in a foreign country, and you must be one of the following:
A U.S. citizen who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year .
A U.S. resident alien who is a citizen or national of a country with which the United States has an income tax treaty in effect and who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year, or .
A U.S. citizen or a U.S. resident alien who is physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months.
Oh, and if you do join Etihad please join the American Chamber of Commerce in Abu Dhabi or Dubai ( Dubai is the cheaper option for individual memberships ). They help to lobby for increases to the foreign earned income exclusion. It periodically comes under attack from Congress and will most certainly again given the current fiscal crisis.
Typhoonpilot
To claim the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction, you must have foreign earned income, your tax home must be in a foreign country, and you must be one of the following:
A U.S. citizen who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year .
A U.S. resident alien who is a citizen or national of a country with which the United States has an income tax treaty in effect and who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year, or .
A U.S. citizen or a U.S. resident alien who is physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months.
Oh, and if you do join Etihad please join the American Chamber of Commerce in Abu Dhabi or Dubai ( Dubai is the cheaper option for individual memberships ). They help to lobby for increases to the foreign earned income exclusion. It periodically comes under attack from Congress and will most certainly again given the current fiscal crisis.
Typhoonpilot
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Typhoon, are the figures used for tax purposes based on BASE salary only.
ie: Flight pay, housing allowance etc etc are Not Inclusive
And to reiterate, 330 days within a consecutive 12 month period is the key. Not necessarily Jan 1 through Dec 31 !
ie: Flight pay, housing allowance etc etc are Not Inclusive
And to reiterate, 330 days within a consecutive 12 month period is the key. Not necessarily Jan 1 through Dec 31 !
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Your AGI takes into account everything after all income (base salary, housing, travel, education, etc.) is calculated and adjusted for all legal deductions (housing offset, per diems, other taxes paid, mortgage interest, etc.).
After you apply the exclusion, you pay tax at the rate in effect if you hadn't applied the exclusion. It's a change from the way things worked a few years ago, but it's better than nothing.
I agree with TP's suggestion about joining the local US Chamber of Commerce. They do good work and are generally well respected on the Hill.
And, don't get hung up on the 330 days issue. If you are a resident on a resident visa, the bona-fide resident status will cover you.
After you apply the exclusion, you pay tax at the rate in effect if you hadn't applied the exclusion. It's a change from the way things worked a few years ago, but it's better than nothing.
I agree with TP's suggestion about joining the local US Chamber of Commerce. They do good work and are generally well respected on the Hill.
And, don't get hung up on the 330 days issue. If you are a resident on a resident visa, the bona-fide resident status will cover you.
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"And, don't get hung up on the 330 days issue. If you are a resident on a resident visa, the bona-fide resident status will cover you."
US citizens must follow the 330 rule OR an uninterrupted period that includes an ENTIRE(Jan1-Dec31) tax year IRREGARDLESS of residency and or amount of income. I wish it was otherwise. As I am on a resident visa, including the official little resident status Passport stamped !
IRS publication 54, page 12. Even a caveman can follow the chart
US citizens must follow the 330 rule OR an uninterrupted period that includes an ENTIRE(Jan1-Dec31) tax year IRREGARDLESS of residency and or amount of income. I wish it was otherwise. As I am on a resident visa, including the official little resident status Passport stamped !
IRS publication 54, page 12. Even a caveman can follow the chart
Last edited by Duh; 1st Dec 2009 at 20:43.
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Why not educate yourself on the legalities of the IRS and their taxation on "wages"? I know several expats who left the USA a long time ago and have no plans to ever return and therefore refuse to comply with their illegal misrepresentation of the "law". Good luck!
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True, but most expats plan on returning to the USA someday. If one goes down the path that you suggest one would have to divest themselves of all property and bank accounts in the USA. It's not for the faint of heart.
My personal opinion is why bother. The first 5 years I was in the ME I paid a grand total of 0 to the federal government. Now I pay around 10% tax on my gross wages. I can live with that. It's a heck of a lot better than when I was in the USA.
Typhoonpilot
My personal opinion is why bother. The first 5 years I was in the ME I paid a grand total of 0 to the federal government. Now I pay around 10% tax on my gross wages. I can live with that. It's a heck of a lot better than when I was in the USA.
Typhoonpilot
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My personal opinion is why bother. The first 5 years I was in the ME I paid a grand total of 0 to the federal government. Now I pay around 10% tax on my gross wages. I can live with that. It's a heck of a lot better than when I was in the USA.
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I appreciate all of the replies. I need to do some follow up on the info you guys provided. Anyways, I'll be there in a few months so best to get a head start on things.
Here is another question. I understand that in order to take advantage of the tax break while employed overseas we must stay out of the use all but 30 days a year. Now, what if your working flights that enter the USA twice or three times a month does that count toward your thirty days or is there an exception?
Who is a good lawyer for USA expats?'
Thanks
Here is another question. I understand that in order to take advantage of the tax break while employed overseas we must stay out of the use all but 30 days a year. Now, what if your working flights that enter the USA twice or three times a month does that count toward your thirty days or is there an exception?
Who is a good lawyer for USA expats?'
Thanks
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Hey Dash, if you took the time to type into you computer irs.gov then Publication 54, you would have answered all of your questions to DATE. It ain't a difficult read. As a matter of fact, about all you need is contained on 4 or 5 pages. Maximum. It'll answer most of your hypothetical questions to !
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Well thanks DUH.. I really appreciate the support that your post provided.. If I wanted smart ass comments I could get that home..
I appreciate all the other helpful posts concerning US taxes.
I appreciate all the other helpful posts concerning US taxes.