Job Discussion Forums

[veiledsentiments]

Ah, but Global... we are talking about the average EFL drone in the gulf, not the very few that are lucky enough to get much more. PI has the reputation of being one of the highest payers in the Gulf. What percentage of EFL teachers are making over US$4000 a month? 10%? probably much less... I know of no other employer that pays a furniture allowance of that amount either. (and that is, in effect, a loan that you could amortize over the 3 years or whatever they use) So, for a single person or a couple with a non-working spouse, you would still probably be under the current number... even including the ticket,

So... you unjustly accuse me of not using my calculator... I was just not talking about the tiny minority in your situation.

VS

[stoth1972]

Please point me in the direction of those high-paying contracts!!!

[globalnomad2]

Hi again Veiled...
Well it takes, what--six years to reach the top salary scale at HCT, assuming you're starting out fairly well? I was near the top after 5 years. Anyway the top is supposed to be Dh.16,600 now, right? that's Dh. 200,000 per year. And what is the family housing allowance for a family with two kids in Dubai now...Dh. 75,000? Add Dh. 16,000 for tickets, which is what I always got for my family (one kid only). Total annually is Dh. 290,000 or $79,000. That's uncomfortably close to the new US tax-free limit (and way over the old allowance of $70,000). That's why I'm glad they assigned me to my apartment when I arrived, without any choice. That meant I could consider the housing required and for the convenience of the employer and therefore I did not have to report its value. These are all facts and thus I have to disagree with you; it is not a bizarre or unusual occurrence.

[veiledsentiments]

I don't recall ever accusing you of being bizarre. But, you're still talking the minority of TEFL teachers in the Gulf... unfortunately...

VS

[Queen of Sheba]

Bindair & VS, I didnt realize I had to file taxes, but you have certainly convinced me that I need to be on top of this. I just had a look at the IRS webpage regarding filing and downloaded the forms. Based on what you guys have said, I see I have to file the 2555EZ (if I meet the 330 day rule-which I do) as well as the 1040. Is this correct? Do you just print them out and mail them in?

Any ideas on how to file for the years that have passed? Perhaps I need to check with the embassy on that?

Thanks for the friendly reminder!

[veiledsentiments]

QoS... let's go to PM for this...

VS

[scot47]

I have seen the forms that my Usanian colleagues have to file in. As thick as a telephone directory !

[like2answer]

Two questions -

1) What happens if an American, who has been living in the UAE for 4 or more years, does go back for a visit to the states and stays longer in the summer and extra holidays to go over the 330 day count? Does that person then have to pay taxes even if that person is a non resident of the good old US of A?

2) Once the gratuity is given, I will be over the limit. Could I not bother to put that in my taxes, given that I "earned" the extra month salary every year?

Thanks for your help.

[veiledsentiments]

Once you have been overseas for a year, you have established bona fide foreign residency and the 330 day rule is irrelevant. In fact, I never filed under the 330 day rule, I used bona fide - check out the irs.gov site to read the rules. All full-time expat teachers meet the rules.

Many people added the gratuity annually even though it wasn't paid until the end... or the alternative is to just add it the last year and pay the tax. Of course the third option is to not add it and hope they don't audit you.

I have never met a teacher who was audited. We are pretty much small fish... But... one must decide one's own risk tolerance...

VS

[Bindair Dundat]

[Bindair Dundat]

[tundrateacher]

I would not recommend this ... but to the poster who didn't file...don't worry too much. I worked in Kuwait for 5 years. Only filed my first year there, with the extention. Then didn't file again until I had left kuwait. Been back in the states for 3 years filing my taxes faithfully and havne't been questioned about the years I didn't file. That might hav been a fluke ...but i surely wouldn't open a can of worms I didn't need to. Make any sense? hope so!

[procrastinator]

Just to throw my two cents into this discussion. Having just finished a semester of Federal Income Taxation (I'm a miserable 2nd year in law school)---the classic definition of gross income we were taught is: an accession to wealth, that is clearly realized and over which the taxpayer has complete dominion. (if you're interested, gross income is defined in section 61 of the tax code and the classic case for the definition of gross income is Commissioner v. Glenshaw Glass).

From what I got in class, almost everything fits into the gross income definition-- so if it makes you richer and you have control over it it in gross income. (note, gross income is just the starting place of figuring out what is your adjusted gross income--to get there, you have the fun of figuring out if your deductions, comparing it with the standard deduction, and any applicable tax credits*).

Thus, technically, when you calculate your gross income, you're suppose to include your salary, extra money that your employer gives you for pretty much anything, anything of value that's given to you (say free vacation, car, free meals etc are calculated at the fair market value). So, if you really want to be living by the letter of the law, there's a lot of stuff to add in there. However, in my humble opinion, as ESLers (especially where I was in Asia), we made so little money, that it was somewhat futile to go through the trouble of adding everything just to find that you don't make enough to even pay taxes on it. Plus, what's the likelihood that your employer is reporting all of the 'gross income' they're paying you? In addition to the fact that some ridiculously low number of private individuals get audited (although if you claim the EIC, you're more likely to be audited, but only to check that if really have the number of children you claim, so it's an easy audit). So, I wouldn't worry too much about getting every possible thing into your gross income figure. When I did my taxes as a ESLer, I just reported my actual salary that was listed on my contract, and nothing else (even though airfare and housing was a part of my compensation). If you want to be on the sale side, I'd include all compensation that's on your employment contract since that's what you'd likely give the IRS if they audit you. Anything above that, the IRS will have a hard time proving you received.

*Deductions and credit are the real pain of doing taxes.
For most people, deductions that are below the line (majority of deductions except for alimony, business deductions, retirement savings, and a few other unusual deductions) are pretty worthless because your deductions have to add up to be more than the standard deduction (which is around $7,550 for single head of household, $10,300 for married filing jointly). If you're really not making a lot of mone (e.i. poverty level), it may be worth your while to look into the Earned Income Credit (EIC), which is the government's way of helping out the working poor.

[veiledsentiments]

Obviously few employers are going to report your income to the government. (I only know of one that does...) The reason for ME teachers to be filing is that the salaries can be significant enough that people are sending cash regularly back home to invest.

If you are sending money back, you had better be filing your taxes. It used to be that only deposits of more than $10,000 were reported to the government, but now almost ALL foreign transfers are reported - especially when the ME is involved.

VS

[ckhl]

VS is right...why fuss with the 300-day rule if you've lived abroad for more than a year? It's much easier to qualify for the bona fide residence test than many realize. Years ago in Saudi, I phoned the IRS rep at the embassy in Riyadh, who told me to claim it. I have done this for the past ten years in the UAE. Do you have a residence visa for the country in which you reside? A driving license? If you do, you qualify.