Job Discussion Forums

Ro_Laren · Joined: 29 Dec 2013 Posts: 5

Sorry guys: this is going be a long post! I have been entertaining the idea of teaching English in Russia as I’ve visited and/or lived there a number of times already, but have never worked there. However, the whole idea of dealing with taxes is quite confusing. I like to plan ahead and have therefore have looked a lot up on the internet. But, the more I research and try to figure expat taxes out, the more questions I have!

If I understand what I’ve read about the US-Russia tax treaty, Americans won’t be double taxed IF they are out of the U.S. for a minimum of 330 days out of the fiscal year (January to December). However, seeing as most teaching contracts begin in August and typically only last 9 months, that means that most American English teachers don’t meet the double taxation exemption requirements and will therefore be double taxed. If so, I’m guessing that is about 25% or more (13% Russian flat tax plus at least 15% American tax). But even that 25% estimate leads me to more questions. Aren’t foreigners living in Russia charged 30% tax for the first 6 months living in Russia?? If I recall correctly, the 17% difference is supposed to be refunded to you if you work (or just live?) there after 6 months. Is this correct? If so, how is it refunded? Do you have to go somewhere to pick up the refund, is it mailed to you, or something else?? Regardless, that is a large chunk of your paycheck. If you take away 30% of your paycheck for the first 6 months AND set aside a minimum of 15% for the American taxes, then that means you will only have 55% of your 30,000 ruble a month salary (or whatever the amount) to live on! Wow!!! On the other hand, I thought I read somewhere that some schools will pay the 17% difference for the first 6 months. Is this typical of language schools in Russia? I think I read this somewhere on-line from someone that was offered a job at English First. If a school agreed to do this then would they typically “pay” the 17% difference by adding 17% to your pay or are they able to directly pay your taxes??

Also, I read that if your school provides you with accommodation then this is also taxable. Is that true? Do you have to pay taxes on this to Russia or to the U.S. or to both?

Do schools typically deduct your Russian taxes out of each paycheck?? Or are you hit with a big tax bill before your leave / whenever the big tax deadline occurs? IIRC, Russians pay their taxes in April too, right? Is it April 30th or something? Regardless, isn’t it true that you have to pay your taxes in full at least a month before leaving Russia? Do schools typically process this / prepare any of the necessary forms?

Lastly, who typically prepares & file your Russian yearly tax forms? Paying taxes in America can be confusing enough to many… I can’t imagine trying to figure out Russian tax forms. Of course, I also read that American expats have confusing tax forms to file for their U.S. taxes: you can’t file the 1040 or 1040EZ. Do we also still have to pay Social Security and Medicare taxes when teaching abroad?

Sashadroogie · Posted: Tue Dec 31, 2013 7:06 am Post subject:

Hee hee!

Sorry, I didn't get past the part of your post where you asked about Russian taxes. Please rest assured that you will not have to deal with any tax nonsense from the Russian side. Everything is deducted in advance by your employer - that is if he is declaring your full salary in the first place, which he more than likely will not be. Most salaries here are 'black', or at least a deeper shade of 'grey'. In any case, you do not need to fill in any forms.

As to the iniquitous practices of the US tax office, cannot help you. I would advocate just renouncing your citizenship and staying in the Workers' Paradise.

Welcome to Russia!

smithrn1983 · Joined: 23 Jul 2010 Posts: 320 Location: Moscow

There are two ways to show that you do not owe taxes in the US (for the first $92000 or so of income. You're a teacher, so it's highly unlikely you'll go over this number). The first, as you mentioned, is to show that you were physically out of the US for 330 of any 365 days. The second is to show bona fide residence in a foreign country. The first is easier to prove, though I used the second method during my last stay in Russia.

As I remember, as far as the first method is concerned, it's 330/365 days and does not need to be an actual calendar year. I think there is a way of indicating this on your US tax forms. You basically defer one year's taxes to the next year, and then claim that you were outside the US for 330 days and owe nothing.

The short answer is that you do not pay US taxes while you're teaching overseas.

spiral78 · Joined: 05 Apr 2004 Posts: 11534 Location: On a Short Leash

Ditto smithrn.

You have to file, but will not have to pay US taxes on your Russian salary (unless you earn some astronomical figure - and if you do that, let us know how!).

Google the US IRS website for tax forms for expats. It's similar to the EZ. Takes me normally about 15 minutes to fill out.

The only other consideration is if you open a bank account in Russia which has more than equivalent of 10,000 USD in it, which you would then have to report (but not pay anything on) to the IRS also.

Ro_Laren · Joined: 29 Dec 2013 Posts: 5

So if your employer deducts your taxes from your paycheck, does that mean that our offered salary is post- or pre-tax? If it’s pre-tax (as in any regular job in the U.S.), should we assume that exactly 30% (or 13%) will be deducted from our paycheck? I’m just curious… I’d want to know that my school is paying me the correct amount!

Smithrn1983, I read something about the $92,000 salary figure, but I forget what I read. I’m guessing that it was just that the tax rules of those making more than that amount are different than those of someone like an English teacher who would make significantly less. Regarding the facts that you mentioned, I thought that we couldn’t apply for Russian residency until we live at least a year in Russia. If you don’t have official Russian residency, how can you claim Russian residency? If it is true that the330/365 days and does not need to be an actual calendar year, then that is good news. But, for that to help any potential teacher then they need to have at least an 11 month contract or they’ll still be double taxed. = (

Spiral78, I thought I read on-line that U.S. expat tax forms are really hard and confusing. Perhaps the stuff I read was talking about the tax forms for the uber-rich.

Does anyone know if we have to pay U.S. taxes on our accommodation if it is provided to us by our school?

ecocks · Joined: 06 Nov 2007 Posts: 899 Location: Gdansk, Poland

They answered your question.

You should file, not difficult and really not even that tedious but unless you make more than $97,600 you will not owe taxes. You may choose to pay into SS/Medi if you wish.

Do you expect to make more than $97,600?

You need to go to the IRS website and look at the info.

spiral78 · Joined: 05 Apr 2004 Posts: 11534 Location: On a Short Leash

No, you do not pay taxes on your accommodation either. Check out the IRS website for expat filing. Mountain out of a molehill, this thread is.

Sashadroogie · Posted: Wed Jan 01, 2014 12:56 pm Post subject:

Tax, tax, tax. We don't bother with that silliness here, hic!

teacher X · Posted: Wed Jan 01, 2014 9:19 pm Post subject:

Ahahaha, I have the opposite problem. I've been trying to get in contact with the Department of Work and Pensions to try and pay some national insurance contributions. After three messages they finally responded stating that they currently have a backlog and cannot help me. I guess they don't want me to give them any money. How strange.