USA Taxes?

msteachkids · Post by **msteachkids** » Tue Jul 05, 2011 8:10 am

I will be leaving soon for my first international position and have a meeting planned later in the week with my accountant. I just want to meet with her to make sure I know what I need to know about working abroad and paying taxes. However, I also want to take advantage of the wealth of knowledge here on this forum!

I have searched the forum and read all the information available on paying American taxes when teaching abroad, but would be interested to hear whether most people claim to be bonafide residents or physical residents. I will retain my home here with plans to come for Christmas break and summers, so I'm trying to decide what would be best for me.

All suggestions, information and tips would be appreciated.

Thanks!

wrldtrvlr123 · Post by **wrldtrvlr123** » Tue Jul 05, 2011 12:48 pm

[quote="msteachkids"]I will be leaving soon for my first international position and have a meeting planned later in the week with my accountant. I just want to meet with her to make sure I know what I need to know about working abroad and paying taxes. However, I also want to take advantage of the wealth of knowledge here on this forum!

I have searched the forum and read all the information available on paying American taxes when teaching abroad, but would be interested to hear whether most people claim to be bonafide residents or physical residents. I will retain my home here with plans to come for Christmas break and summers, so I'm trying to decide what would be best for me.

All suggestions, information and tips would be appreciated.

Thanks![/quote]

As I recall it doesn't matter which one, as long as you qualify for one of them. The physical presence is more straightforward. If you are a teacher there is a good chance you have to file an extension your first year in order to get the 335? days you need to qualify. Your account should be able to help you with the details of the bono fide test if you plan on being back in the country more often than just summer.

wrldtrvlr123 · Post by **wrldtrvlr123** » Wed Jul 06, 2011 3:39 pm

[quote="PsyGuy"]Your really that keen on paying your taxes??? I applaud you, but most teachers just claim the Foreign Tax Credit whether they meet the test or not. Your "there" not "here", and there aren't any W-2's. So its not like there a lot of paper trail for the IRS to follow if they were to audit you.[/quote]

I'd love to claim some deeply held ethical beliefs, but really I just want to avoid any problems. I've had problems in the past with the IRS from owning a small business years ago. It took a long time to get things cleaned up and I don't want to go back there again. You do have to put down the dates you have been out of the country on the 2555 Foreign Income Exclusion form and I guess I was always worried that someone would check if I fudged the dates to make myself qualify (and filing an extension to legitimately qualify is no big deal really). I did find it funny that the IRS doesn't even attempt to ask for any documentation of the income we earn. My fondest dream is to someday HAVE to pay taxes on the money I earn OVER the $80,000 exclusion.

msteachkids · Post by **msteachkids** » Thu Jul 07, 2011 10:48 am

Just got back from meeting with my accountant and here's what she told me.... She said I would need to go ahead and file my 2011 taxes as I normally do and then will need to file an amended return once I meet the 12 consecutive months rule.

She also informed me that I would be required to pay self-employment tax at a rate of around 14% on my earnings WHAT? I wasn't expecting that.

JISAlum · Post by **JISAlum** » Thu Jul 07, 2011 11:02 am

[quote="msteachkids"]She also informed me that I would be required to pay self-employment tax at a rate of around 14% on my earnings WHAT? I wasn't expecting that.[/quote]

Never heard that. You might get a second opinion....

Crgallen22 · Post by **Crgallen22** » Thu Jul 07, 2011 1:08 pm

I would definitely get a second opinion. There are accountants out there who work with expats. They will know all the specifics.

msteachkids · Post by **msteachkids** » Thu Jul 07, 2011 6:43 pm

So my question is.... do any international teachers pay this self employment tax? Mine, at 15%, will be about $8000 and to be honest - I don't want to pay it!

JISAlum · Post by **JISAlum** » Thu Jul 07, 2011 8:49 pm

When my wife and I were overseas we filed our US taxes through a US company in our host location. We were paid over the exemption limit, but since we also paid local taxes, we ended up not owing taxes in the US.

The tax company (can't remember which- but one that is well known in the US) we contracted with not only understood expat issues, local tax law as well as US tax law.

I've never heard of self employment tax being paid by expats. Wherever you are going I've got to believe there are tax companies that are used to dealing with US expat taxes. I'd rely on them.

buffalofan · Post by **buffalofan** » Thu Jul 07, 2011 10:34 pm

Do not listen to any accountant in the US about Foreign Income issues, 99% are clueless about this area. You are NOT self-employed. Quite easy to file without the help of an account, you just file 1040 (can't use the 'a' or 'ez' forms) and one extra form for the foreign income exclusion.

By the way, there are international schools who will pay into your SS while you are working there, and there are some international schools (those which have a US office or other strong connections to the US) who will indeed issue you a W-2 at the end of year.

msteachkids · Post by **msteachkids** » Fri Jul 08, 2011 6:41 am

Buffalofan,

Do you know what that tax form number is? I would like to look at it.

Also, on that tax form does it ask if you have paid the self employment tax? Just wondering where and if that would be addressed on there....

USA Taxes?

USA Taxes?

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