How does the tax thing work?
You should (although most people don't) declare your foreign earned income to the IRS. The US embassy has all the forms you need. Luckily, you pay no tax on income under....um.....poop....is it $50,000? $70,000? Some high amount that you will never earn in 20 lifetimes of working in Asia, so your safe.
As far as local/national taxes, your employer is responsible for deducting them. Luckily, the taxes in Thailand are a small percentage of your income. For example, at 40,000 baht per month, you should pay no more than 1,600/month in taxes. I have no idea how refunds work.
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Right. The Earned Income Exclusion on foreign income is around $85,000. I think there's a two-year exemption on teaching in govt. schools, also. PM me if you'd like.
"The times I've been mistaken, it's impossible to say" - by the Moody Blues
From the Thai point of view, if you are officially resident (i.e. in the country for 180 days in a given calendar year) you must pay Thai income tax on (a) all your income in Thailand, and (b) all income brought into the country from overseas. If you're non-resident, you're only required to pay (a) above.How does the tax thing work?
The tax year runs from 1 January to 31 December, and you must submit your tax return and pay your tax by 31 March following the end of the tax year.
As far as tax in your home country, that varies from country to country. The US is particularly tough, taxing all worldwide income of US citizens. With the UK, once you're declared non-UK resident you are only taxed on income arrising in the UK (e.g. from UK-based investments). However, many countries have "dual taxation" agreements with Thailand so that you are given credit in one country for tax paid in the other, so you're not taxed twice.
There's a lot more info on this over at thaivisa.com
You declare your income in the US, but if it doesn't go over 78,000 USD a year (or so, it changes every year for inflation) you pay zero tax in the states. Be sure to point that out to Brits and Canadians. Hehe.
Here in Thailand your employer will either pay or pretend to pay and pocket about 5 to 7% of your income. The uppermost tax bracket in Thailand is 10% of your salary, but you'd have to be making in the neighborhood of 100,000 a month to draw that.
I don't think us Brits have to pay Jack shit in tax (to the UK), regardless of how much we earn....tee hee!Originally Posted by Sheep-Goats
Riddle me this brother can you handle it
Your style to my style you can't hold a candle to it
Equinox symmetry and the balance is right
Smokin' and drinkin' on a Tuesday night
It's not how you play the game it's how you win it
I cheat and steal and sin and I'm a cynic
Great, the US won't be able to tax me because I'll be making peanuts, and the Thai tax is minor.
actually a word of warning to americans in thailand, in the american embassy in bkk they have a guy there who purely chases up tax for the irs.
a friend of mine who happens to be quite a wealthy american received a phone call from this guy who told him he was at the embassy and wanted to know why he hadnt filed, etc etc etc, he had a lot of info about my friend but my friend just thought it was a wind up and told him to fok off, that nite he thought about it and the next day decided to phone the embassy, he was pretty embarrassed about being put thru to the guy that had phoned him the previous day..
When I asked at the Chiang Mai consulate general's office, they said that an IRS rep only goes to Bangkok occasionally. IRS functions include customer service, auditing, collection, criminal, filing & processing, etc. I seriously doubt there's a big IRS presence in SE Asia. But if you're 'quite wealthy,' it's worth their time. If you're just teaching English and don't have $50,000 per year in investment INCOME, I doubt they'd be tracking you down.
There are remote parts of the USA where I would go to as an auditor and just rake in the checks, because once we got out there, the pickings were easy. But there were some places we hardly ever went to.
question
Does an American citizen have to file even if working for a small amount of money in a foreign country?
I alsways get conflicting info. about this.
Yes.
It depends on your total income. I'll guess that a full time teacher making 300,000 baht per year has an annual income of 7,500 dollars, no more. The filing requirement is usually a dollar amount equal to your personal exemption (about $3,100) and your standard deduction (at least $4,900). So if your total earnings and gross income before any deductions are exemptions are under $8,000, you're not required to file. Of course, if you had additional income that wasn't sheltered, of say $3,600, you'd probably have to file, but then your ajarn income is deductible, so you file but you don't pay any tax.
Clear yet? No, it's never clear.
Thanks to both of you, above.
I should note that I have no "traceable" income.
I have filed over the last 5 years, when I have reported hardly any "legal" income.
i think its a federal crime if you dont file, but if you file and dont pay(not that you would need to on asian salaries) thats not federal
Yeah, more or less, dirty dog. Failure to file is not a felony, and I don't even know if it's a 'misdemeanor' but failure to file has an administrative penalty of 5% per month, up to 25% of the total (plus interest, plus how much you owe, etc, and penalties and interest on the penalties and interest). Failure to pay can be another 25% of the amount not paid, plus plus.
The IRS doesn't need to try you for a crime, the jury find you guilty, and the govt. incarcerate you. At least when I worked there, you just owe and owe and pay and pay. Unless, of course, you disappear somewhere they can't trace you to, and stay there forever making some lordly salary such as 30,000 per month. Baht or kip, not dollars.
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