Korean Job Discussion Forums

[cedarseoul]

When I was in Hong Kong last summer, sitting poolside and sipping a margarita, I recall reading an editorial in the South China Morning Post about local expats and the US FEIE. There was some speculation that Congress would eliminate the FEIE as part of the budget overhaul.

It seems this is still a topic of discussion in some circles: http://www.aca.ch/joomla/images/pdfs/comm12.pdf

And with the Republicans now tacitly acknowledging the possibility of limiting "deductions and certain tax breaks" (http://www.politico.com/news/stories/1111/67884.html), I'm forced to wonder...

Could our precious 2555 exemption be in jeopardy?

What would this mean for the many thousands of American teachers in Korea, China, Taiwan...?

I'm sure some people would simply choose not to file (and risk the consequences), but for those of us law-abiding expats who have filed on an annual basis, and who wire money home...things could get very, very ugly. Especially since any policy change could quite possibly be retroactive to January 1, 2011...so it's not like we have a whole year to prepare.

The supercommittee deadline is looming. I'm curious--and more than a little apprehensive--to see what they come up with.

[tran.huongthu]

They are so broke they will try to get the money from the working class any way that they can. I don't see how we can be double taxed but you never know.

[sirius black]

They would have to rely on the honesty of the tax payer for the most part. Countries don't report ameican income to the IRS. The IRS doesn't have the time and money to go chasing after the thousands of Americans working abraod.

If you work for an American subsidiary then they can find the money easier but I wouldn't worry as much about it.

The IRS works on getting big money first. If you owe a small amount its worth it for them to pay some guy 40k a year to chase $500. Letters, computer generated letters, etc. are what those folks get, as well as add ons in penalities and interest to make it worthwhile.

Anyway, the country is desparate and many sacred cows are going to the slaughter. Some of it is a good thing like the possibility of legalizing pot. However, most of is bad. They will tax us, hidden or otherwise to death...until enough people make a stand.

[Steelrails]

See what happens when you vote Democratic...

[Kuros]

Politically, I can hardly think of a less sympathetic interest group than Americans earning big money working in Singapore or Hong Kong. Nevertheless, Americans abroad are taxed the difference between what the US would tax them and what their resident countries actually taxes them. The foreign exclusion is the only semblance of sanity and limit on this: if you're making less than $100k, Uncle Sam should butt out. But I think sirius has the political calculus right on this one. The foreign income exclusion is a loophole, and it doesn't benefit large swaths of the American public. Expect for the supercommittee to target it.

[ontheway]

[cedarseoul]

My hope is that is the exclusion is targeted, it won't be completely eliminated--but rather limited, restricted, reduced, or something to that effect. That seems to be in line with current GOP thought (vis a vis Pat Toomey's proposal).

I also hope that any changes will be implemented for 2012 forward, rather than retroactively...but in many cases tax law changes are retroactive.

Bottom line: if the exclusion is done away with, a SIGNIFICANT advantage to teaching abroad will also be eliminated. The vast majority of ESL teachers earn well below the exclusion limit, and the thousands in additional tax dollars wouldn't sit well...