Job Discussion Forums

Qaaolchoura · Posted: Sun Apr 11, 2010 3:47 pm Post subject: Taxes

OK, so I'm a citizen of, so far as I know, the only developed country to tax both alien residents and its own citizens abroad. (OK I read this in /The Economist/, in an article lamenting the US tax code, but it's still a trustworthy source.)

I know that some countries, such as Korea have a tax exemption for the first couple years, but I'd really rather not go to Korea.

However when I was lamenting this fact, somebody told me that a number of countries have agreements with the US, whereby income of US citizens below a certain amount (I think it's 30 k or something like that), get a tax credit for the amount paid, and hence it's not double taxed, and that it requires a special form. But I don't remember the details--how I find the form, figure out which countries it applies to, etc.

So I'm wondering, I'm sure other Americans must've dealt with this issue. Is it true you can get a tax credit for foreign income taxes in certain countries? And how do I find out which countries, and how it's done?

johnslat · Posted: Sun Apr 11, 2010 4:42 pm Post subject:

Dear Qaaolchoura;

http://www.irs.gov/businesses/international/article/0,,id=96739,00.html

Regards,
John

Qaaolchoura · Posted: Sun Apr 11, 2010 6:02 pm Post subject:

Sweet, thanks!

Glenski · Joined: 15 Jan 2003 Posts: 12844 Location: Hokkaido, JAPAN

Basically, you file a 2555 or 2555EZ form with a 1040 form, my fellow American, and you are exempt from paying US taxes on foreign earned income below a certain threshold (roughly $87,000 this year).

denise · Joined: 23 Apr 2003 Posts: 3419 Location: finally home-ish

And you get a two-month extension, too. You just have to write a letter telling them that you're abroad and you qualify for the extension. I'll have to do that yet again, since the 15th is almost upon us...

d

naturegirl321 · Joined: 04 May 2003 Posts: 9041 Location: home sweet home

I think it{s something like 91,400, but you have to pass the little test that they put on the top of the 2555EZ. YOu can also file the 2555 if you're taking deductions, such as housing.

Glenski · Joined: 15 Jan 2003 Posts: 12844 Location: Hokkaido, JAPAN

Yes, for 2009 taxes it's $91,400. Every year it goes up a little. Unfortunately, salaries here in Japan don't.

naturegirl321 · Joined: 04 May 2003 Posts: 9041 Location: home sweet home

Glenski · Joined: 15 Jan 2003 Posts: 12844 Location: Hokkaido, JAPAN

Banded together? Who? There is no central authority that would listen. Temp contracts rule in Japan. Argue, and your contract doesn't get renewed, and the next desperate teacher takes your place.

The standard salary for entry level work stood at a fixed figure for over 2 decades. In the past 5 years or so, it has slowly begun to drop. Employers use legal loopholes to do that. It's pretty tough to fight. And, for those who stay, there isn't much in the way of salary increases to offset inflation.

gaijinalways · Joined: 29 Nov 2005 Posts: 2279

Glenski posted