Job Discussion Forums

[daily chai]

Thanks Paul for adding that last bit. I don't plan to retire in America either. I'll take up the suggestion from your accountant & broker too. I wonder why more people with the expat bug don't retire abroad. It's often much cheaper than their native country.

[KiteBiker]

Canadians have had it a bit different. With non-residency comes no taxes. You might say I was a tax refugee while in the Middle East. We sold everything, house, cars, dog, horse. We had to snip up our credit cards, drivers license, health cards. Even my library card. With all ties to the home country cut, I could earn my money tax free. With a tax rate of well over 46%, this was worth it. It also meant not having a home base. When we returned after 4 years, we had to acquire all the "stuff" and "trappings" of a home [wasn't worth our while to buy and move stuff from the ME]. It's been 1.5 years now and we can finally say we are now settled.

I understand the French and the Americans must pay taxes no matter where they live, so this is a different story for them.

I'm now looking for another oversea post, while trying to maintain a home and my family in Canada. The only way I can conceivably achieve this and hold on to a tax free status is by working through the UN.

Does anybody have any experience working for these folks?

[Stephen Jones]

American's are only liable after $75,000 and then any tax they pay in their host country is normally discounted under double taxation agreements.

[KiteBiker]

I guess, then, that it is to an American's advantage to seek employment in countries where there is tax treaty if they earn more than 75k and to seek countries that have no taxes and no tax treaty if they earn less than 75k?

[scot47]

There cannot be many EFLers who get more than $75,000 a year !

Of course we will now see posts from the fantasists who will tell us that they earn twice this and work for only 2 hours a day.

[dmb]

[veiledsentiments]

Let me just jump in here and tell Paul that there has been a change in the US capital gains laws (in about 1997) and there is no more rollover into a new property. The newest catch is that you have to have lived in the house for 2 of the last 5 years to avoid taxes on the gain of less than $250,000 if you are single. But, you can do it unlimited times.

You can all go back to waiting for that long list of jobs paying over $75,000. (by the way... that would be salary plus benefits, so there are a few around who are having to pay a little in taxes after adding in the value of rent and free tickets...)

VS

[Gnome]

Actually, Canadians can maintain a residence and ties in Canada as long as they work for a Canadian company operating overseas. They will then have to pay taxes, but "The Overseas Tax Credit" clause will mean that they just pay around 10-15%. You need a good accountant who specializes in Canadian Expat Tax Situations to do the taxes. Very expensive, but well worth it.

Who are these Canadian companies? Check out the big names in the Petroleum Industry. With Libya opening up, and Nexen, Petro-Canada and Talisman all accompanying Paul Martin last week on his to the country, hopefully something will be happening in the near future. CIDA and the UN also pay very well and have the same tax arrangements. There may also be some universities and colleges, for example the College of the North Atlantic, which runs a college operation in Qatar, which pays Canadian taxes that allow you to maintain a residence and ties in Canada. If possible, you can also incorporate yourself as a "Shelf-Company," and work anywhere as a Contract Employee. Of course, most educational and medical facilities won't hire you, because they don't understand the concept. Stick with very large international companies which do.

[Never Ceased To Be Amazed]

I agree with VS. However, you "'Mericans" need to keep up with the times. In reaction of Clinton trying to steal away our exemption to get elected in '96, Congress upped the exemption from $70,000 to $80,000 to be done in 5 $2000 increments year-by-year. We now enjoy $80,000 a year exemption as do our spouses. That is until some numbskull in the White House yet again, forgets his basic math and discounts the massive help we do to the U.S. by working abroad, not using the American infrastructure, and keep pouring our money into the American economy! P.s.- For those of you who don't think that there are those "75,000" a year jobs out there, I know from personal experience subconning for both Boeing and Raytheon in the "Magical Kingdom", that the U.S. government considers your housing to be considered as part of your income for tax purposes...the rent that the Saudis we're paying on our place on the Jedawal Compound alone was $50,000 a year in reportable income. Thank God that my wife's exemption covered that!

[veiledsentiments]

Neverceasetobeamazed

Even with housing (and those free tickets' value should also be included) there are few that would go over the $80,000 - maybe 5% of EFL teachers. I always valued the rental amount myself - ignoring whatever sweetheart overpayment agreements may have been made by employers. I used a reasonable estimated monthly rental amount - for most of us, there is no way for the US government to know how much is actually paid. (most of us never see a lease or know what the amount would be anyway...)

VS

[Bebsi]

What's this about earning less than $75 K? I hear some do, but I have a lovely number where I teach women in their twenties English for two hours a day, and get paid $100,000 a year. Tax-free, of course, also I get villa accom on the beach (with my own pool), a nice car (525 BMW), health insurance, pension plan, and vouchers for a local French restaurant. Not to mention 5 months's hols, with 3 Business-class flights paid each year to wherever I want to go. Such jobs are very easy to find, of course!!!!!!!

Where is this job, I hear you all ask? It's in a place where not many EFLers go but many aspire to, and a few really sad cases believe they are there. It's called Utopia.

Seriously though, my tuppence ha'penny worth of advice for Dan. I know nothing about US tax laws, as I don't have to pay tax on earnings outside my home country (Ireland) as long as I am non-resident (184 nights outside the country in a year). However, it seems to me that you should go for it, Dan, if you feel it is a good bargain. Your rental income will cover your mortgage, maintenance costs, management fees etc. I would also say, yes, get a management company (if you trust that guy, get him to do it) to look after your interests, as otherwise you could get badly burnt by tenants. Wherever you go in the world, ultimately, you will have an asset to come back to. Apart from that, if you are a couple of years away, think of possible capital appreciation? You say the area is going to be cleaned up...called 'Gentrification'...and the light rail is coming close? Sounds like a good investment to me, go for it. By the time you read this, you may have decided to anyway. Either way, good luck...remember, money in property is safer even than in the bank.

[scot47]

"money in property is safer even than in the bank."

Tell that to the guys who invested in the tropical paradise of Guadalcanal in 1938. Or to those who had property in Central Dresden pre-1945.

[Bebsi]

Yes, of course, there are exceptions to everey rule....what about the poor sods who had money in the bank in 1929? Or even those in Ireland who left their money in the bank during the 1990s and missed out on a great property boom?

Seriously, I think you'd agree that generally speaking, money is safer invested in property than anywhere else? Things can always go wrong, of course, but buying a place in an up-and-coming area of Dallas can hardly be that dangerous? I mean, look at JR? It made him quite a deal richer!!!!!!!!!!!!!!! Bet even the Kennedy's have money invested in Dallas!!

I used to have an old relative in Ireland, now long dead, who believed that money in the bank was complteley unsafe. "What about bank robbers?" he would say. He wouldn't accept any arguments to the contrary. When he died, his closest relatives found tens of thousands of pounds in biscuit tins under the bed, some of which had been there probably since the 1940s. I guess he han't taken inflation, the change to decimal currency in 1972 and the EMS in '79 into account. HE was a man who thought he was really playing it safe...is there such a thing as "safe"?

[Stephen Jones]

Anybody who invested in Japan just before the crash lost money, and has not yet regained it.

There were plenty of cases in the late eighties in the UK of people with mortgage nearly paid off who bought another property to rent, gave their first property as collateral, and lost both when the values crashed by 30%.

Rust belt properties haven't gained a great deal in price either.

In general though property is a good long-term investment. You just have to remember the three Ls: location, location and location. Of course few if any EFL teachers have the cash to buy in the right place.

[Bebsi]

I agree, it's all about location. I also take your point about not many ESL teachers having the money to invest in good areas, but anyone thinking of investing their hard-earned Saudi dosh, I would say, be REEEEALLLY careful. Estate agents are the last people in the world I would trust. A good lawyer on the ground is vital as local laws and customs can be a quagmire (eg. in many continental European countries the PURCHASER pays the estate agent's commission, which can be as high as 10% in places). And yes, a safer but 'lower-returns' investment somewhere you know is far better than a "get-rich-quick" development in Basra or an attractive bargain in beach pads in Phuket.

Now, if anyone's interested, I have an off-plan apartment development with excellent potential in downtown Tirana.................... (I know, I know, someone will probably write in here to say they made a massive killing n Albania last year!!!!)