Job Discussion Forums

[The Great Wall of Whiner]

Have the IRS been trying to track you down while working in China? I have a friend in Canada who is now "wanted" by the US authorities for not paying taxes, even though he has been living in Canada for almost 15 years.

Curious:

Are you folks really obligated to pay U.S. taxes back home on the income you earn from your job in China?

http://www.ctvbc.ctv.ca/servlet/an/local/CTVNews/20110917/bc_irs_targeting_dual_citizens_110917/20110917?hub=BritishColumbiaHome

[choudoufu]

yes and no.

we are obligated to file a tax return, regardless of whether we
have to pay tax....federal and (sometimes) state.

all income, regardless of source, is income for tax purposes.

but we have a nifty foreign-earned income exclusion of
around US$90K per year. not many engrish teachers are
going to be making more than that.

we also have a standard deduction and personal exemption, total
of around 8K for single filers, which applies on whatever is left
after your foreign income exclusion.

gotta add in the capital gains and dividends, although we get
another two years of zero cap gains up to around $32K.

so there ya go. we gotta file if we have any income, but most
likely won't have to pay anything other than the cost of mailing
the return in.....unless you have a simple return and can e-file.

******************************

the above works nicely. last year AGI was $41K, tax $0

*****************************

there is currently a tax amnesty program in effect. ending soon.

http://www.theglobeandmail.com/globe-investor/personal-finance/us-tax-amnesty-not-cheap-or-popular/article2159537/

http://www.cga-bc.org/about_us.aspx?id=13500

[7969]

The people interviewed in that link are reportedly dual citizens. They probably thought (mistakenly) that any obligations they had in the US ended when they became Canadians.

They should have read the fine print on the inside back cover of their newly minted Canadian passports, part of which reads that Canadian citizens who have more than one nationality are still subject to any laws and obligations in the other country in which they hold citizenship.

[Guerciotti]

What Choudoufu said. You file your tax return and use form 1116 for the tax credit, a credit for income taxes paid to another country.

The TP (taxpayer) must file a tax return every year even if working overseas or in another country. Most of the prey's problems will most likely vanish if they file income tax returns for the years they were abroad - or in Canada - with form 1116 attached to show little or no taxes due to the IRS. Them folks should start filing returns before the IRS places liens on property or freezes accounts. I'm not sure if they may do so in Canada but they certainly do in the U.S. Unfortunately some people ignore tax returns until the IRS does freeze an account.

I don't make enough to exceed the standard and personal deductions, but I save a ton of money here. Go figure. I'm certain the IRS has not launched a search for me in China or anywhere else.
G

[eslteach]

I talked to someone at the IRS in 2009 and they told me I had to file a tax return but that I wouldnt actually get in trouble unless I owed taxes. Its just about impossible to earn enough teaching in another country to actually owe taxes, so I havent been filing returns most of the time.

[TexasHighway]

choudoufu wrote:

[Mr. English]

If you earn less than U.S. $8500 you are not required to file, and who is keeping track here in China?

[samhouston]

[askiptochina]

[Opiate]

[SahanRiddhi]

[roadwalker]

[askiptochina]