Expat tax issues
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Joined: Oct 2000
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From: Baltimore
Expat tax issues
so i might have a new assignment that will take me and my family overseas. before i go though i want to make sure the package is OK. does anyone know anything about paying taxes on foreign income and any other expat knickknacks?
thanks!
thanks!
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Joined: Aug 2006
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From: USSA
Why ask the board when you can go straight to the ultimate authority?
http://www.irs.gov/faqs/faq13.html
Have fun in China!
http://www.irs.gov/faqs/faq13.html
Have fun in China!
Joined: May 2001
Posts: 1,118
Likes: 2
From: Bergen County, NJ
I was an expat in the UK for ~ 12 months in the early 90's, but I can't imagine much has changed.
Taxes are a Royal PITA and took years to unwind once my assignment was up. I worked for a large multi-national investment bank, they engaged KPMG to prepare both my UK and US returns. Both tax authorities wanted a large chunk of my income. It is something I would not even consider doing for yourself. Your tax liability, and who actually pays it, should be discussed in advanced with your company. The way it worked for me, KPMG did 1) a UK return, 2) a US return with all the 'expat' add-ins and 3) a US return based on my base salary. Any liability over version 3 was paid by the firm.
There are literally hundreds of other considerations to consider when you negotiate your package.
House-US, will you rent it or sell it? Does your company help with those transactions, manage the property for you?
Transitional Housing - will they put you up on a hotel for a few weeks while you settle in?
House hunting trip - will they let you fly over in advance to find a place? will they pay for a realtor?
House Allowance - Overseas, is it just rent or all utilities and licences (in the UK, they had a TV licence which was pretty expensive)? What about insurance and maintenance, who is on the hook?
Moving - can you bring your car? will they provide storage for you if you don't take all your US possessions? Will they ship via air or sea, difference can be weeks? Make sure you get plenty of insurance?
Education/Childcare - will they pay for 'expat' school?
Jobs/sponsorship for spouse - will they get your wife a job or sponsor her to work? If not, will they compensate you for lost wages?
Automobile - Allowance? Insurance?
Salary equalization - How do they calculate COLA? What will you be paid in USD or local CCy? Do they offer inflation/expense hedge?
Trips home - will they pay for a return to the US? or a trip to a vacation location?
Did you approach them or did they approach you? You'll have leverage if they need your skillset overseas, don't forget that.
If you have any questions, I would be happy to answer if I can.
Taxes are a Royal PITA and took years to unwind once my assignment was up. I worked for a large multi-national investment bank, they engaged KPMG to prepare both my UK and US returns. Both tax authorities wanted a large chunk of my income. It is something I would not even consider doing for yourself. Your tax liability, and who actually pays it, should be discussed in advanced with your company. The way it worked for me, KPMG did 1) a UK return, 2) a US return with all the 'expat' add-ins and 3) a US return based on my base salary. Any liability over version 3 was paid by the firm.
There are literally hundreds of other considerations to consider when you negotiate your package.
House-US, will you rent it or sell it? Does your company help with those transactions, manage the property for you?
Transitional Housing - will they put you up on a hotel for a few weeks while you settle in?
House hunting trip - will they let you fly over in advance to find a place? will they pay for a realtor?
House Allowance - Overseas, is it just rent or all utilities and licences (in the UK, they had a TV licence which was pretty expensive)? What about insurance and maintenance, who is on the hook?
Moving - can you bring your car? will they provide storage for you if you don't take all your US possessions? Will they ship via air or sea, difference can be weeks? Make sure you get plenty of insurance?
Education/Childcare - will they pay for 'expat' school?
Jobs/sponsorship for spouse - will they get your wife a job or sponsor her to work? If not, will they compensate you for lost wages?
Automobile - Allowance? Insurance?
Salary equalization - How do they calculate COLA? What will you be paid in USD or local CCy? Do they offer inflation/expense hedge?
Trips home - will they pay for a return to the US? or a trip to a vacation location?
Did you approach them or did they approach you? You'll have leverage if they need your skillset overseas, don't forget that.
If you have any questions, I would be happy to answer if I can.
