Job Discussion Forums

[rupert shellgame]

Do we need to pay taxes in the US?

[BigWally]

Are you still a US citizen? If you answer yes, then yes.

[Taylor]

Do a quick Google search (or the IRS website) and find out about the Form 2555-EZ. It should be all you need, in addition to your 1040. If you are single, the 1040-EZ might also work. You won't owe anything to Uncle Sam that you've earned in Taiwan...

[BigWally]

I just assumed it would be similar to Canada. My friend just got notified that he is being audited for the 2 yrs that he was living in Taiwan. He's not sure how its going to work out, but he's assuming not well. He's going to have to explain how he was magically paying off credit cards, student loans, etc, without any form of income.

[parrothead]

If you earned less than the equivalant of $87,600, then you DO NOT have to pay U.S. taxes for earnings you made abroad. You STILL HAVE TO file your taxes and tell the IRS how much you made while abroad. Use the forms available on the irs.gov website: http://www.irs.gov/businesses/article/0,,id=182017,00.html

[Taylor]

Hi Big Wally & others,

Thanks for the info about Canada. I remember a few years back, a Canadian contacted his 'credit card company' about some small matter. When he mentioned that he was living in Taiwan, the card was automatically cancelled and the balance was 'due in full'.

That's at least how he told me the story. Have you (or anyone else) ever heard of anything like this?

Sometimes a little confusion in the government is a good thing, by the way.

Taylor

[MyTrunkshow]

US and Canadian tax laws are one area where the two countries are extremely dissimilar.

Also, each country's tax treaties held with countries are equally dissimilar.

There are 4 million US expats working abroad who contribute $10 billion US a year to the IRS. Parrothead is correct. The $87.000 figure was gradually increased from $70,000 a few years ago. Even a non-American has to file IRS taxes at an American school if working for them.

Broadly, Canadians either are non-residents for 2 years where tax status can become retroactive and no CDN taxes need to be paid or if less than two years abroad, the individual is required to report world income. (In practice, few claim taxes if employed by lang. schools - large companies are a different story.)

If BIGwally's friend was in Taiwan for 2 full years, he's likely automatically qualified for non-resident status, so his audit is not necessarily bad news. His passport is the document that will verify his length out of country.

As for the credit card story, the only small matters a credit card company cares about is for non-payment. I have had credit cards and many expats have credit cards and as long as payments are paid and a Canadian address is maintained on the CC, all runs along well without call centers calling. Present yourself as a runner and I'd demand payment too. (ie. out of country and behind in payments...)

[BigWally]

I actually claimed my income from Taiwan, and filed my taxes diligently. Well, I should say I had my father do all the paperwork for me, and I faxed him the important info. And lo and behold, I end up getting a refund because technically I made below the (Canadian) poverty line, or at least thats what the tax forms my cooking-the-books-boss gave me said.

[yamahuh]

Exactly what I do too ... just forwarded my witholding and non-witholding tax form to my tax guy this morning actually.
Sometimes it works to your advantage, other times not so much.
Last year we had to pay taxes; not much but some, and this year the school we work for has seriously underdeclared our income so we have made less than the Canadian poverty line (officially).

MTS; my understanding of resident v non-resident status is that you have the option of declaring yourself non-resident after 2 years out of the country. No taxes need be paid but you also lose your 'resident benefits'.
For us the prospect of losing our Health benefits wasn't worth the minimal expense of having to pay taxes.

Big Wally; you have a PM.

[MyTrunkshow]

[yamahuh]

[MyTrunkshow]

Apologies, my post was not meant to belittle you.

You have a lot of good information there.

Here is a site that explains things rather well:

http://www.cra-arc.gc.ca/tx/nnrsdnts/ndvdls/dmd-eng.html#b

Basically things that are allowed to own/have to obtain non-resident status:

Housing that is rented to the market (housing tax needs to still be paid)
Savings accounts - no direct deposit
Credit Cards (statements may be req'd)
RSPs
Money in its many forms (but capital gains must be addressed)
Driver's license (but renewal is an issue)

Things that are most unfavorable for wanting to be deemed a non-resident:
Spouse/children at home (numero uno!)
Car insurance/registration (numero dos!)
Housing that is within the family or not at arm's length.
Active chequing accounts
Club memberships, professional associations, etc.
Things in one's name such as: telephone/utilites/cable/
Maintaining prov. health insurance

mts.

[yamahuh]

So, now that we've well and truly hijacked this U.S. tax thread and turned it into the Canadian residency thread I propose a truce.

Apologies accepted.


And my apologies to the OP.

[SanChong]

[Anubis]

So, I was out of the US for 7 months teaching in Taiwan. I have no receipts/pay stubs/tax forms or anything. When I file my taxes in the US, do they require official forms or receipts or do I just declare how much money I made and they take my word for it?