Tax Question For Americans In Thailand

[FarangNoi21]

if you are filing a joint return with your spouse, does the foriegn earned income exclusion double? i think it is around $80,000, so for a couple, does it turn into $160,000?

thanks.

[Old Man River]

if you are filing a joint return with your spouse, does the foriegn earned income exclusion double? i think it is around $80,000, so for a couple, does it turn into $160,000?

thanks.

According to the tax software I use, its USD 80,000 for you and USD 80,000 for your wife. That totals USD 160,000, but it isn't USD 160,000 for you or your wife. Also, please remember that in the new tax laws, you will be taxed on US income at the tax rate as if you didn't have any foreign earned income exclusion. If you have US based income, this ups the amount of tax you will pay on that income.

[lanny]

You each get an exclusion of $82,400 but you cannot share. In other words, if you have earned income of $100,000 and your wife has $64,800, you have a total exclusion of $146,200 -- $82,400 for you and $64,800 for her.

There is also a housing exclusion if your housing costs exceed $13,184. You can claim an exclusion for the excess, up to a defined maximum (for Thailand, the maximum is $36,600.)

Beginning in tax year 2006, you calculate your tax without taking the exclusion and then subtract the tax on the amount excluded. The effect is to tax income not excluded at the higher rates. This doesn't affect many expats but can be costly to those with salaries much above the exclusion or income from sources other than their salaries.

[Scott]

One of the nice things about being poor is I don't have these problems!

[Old Man River]

Beginning in tax year 2006, you calculate your tax without taking the exclusion and then subtract the tax on the amount excluded. The effect is to tax income not excluded at the higher rates. This doesn't affect many expats but can be costly to those with salaries much above the exclusion or income from sources other than their salaries.

Lanny, actually I have found this impacts most expats I talk to. Whether it is rental income, interest income or whatever, most still have annual US based incomes that are now taxed at the much higher rate. Any suggestions you have to mitigate this would be appreciated.

[youbet]

Any suggestions you have to mitigate this would be appreciated.

A trip to the H&R Block web site springs to mind to see who does it for them here.

[mrt273nva]

One of the nice things about being poor is I don't have these problems!

I agree with you there. Rich people problems are still problems.

[Old Man River]

Any suggestions you have to mitigate this would be appreciated.

A trip to the H&R Block web site springs to mind to see who does it for them here.

I am one of "them". I use Tax Cut (H&R Block). My question was to Lanny, a CPA who might have ideas on ways to mitigate taxes since he lives in Thailand. Tax Cut is useless for ideas, although it is a good software program for general use.

[lanny]

There are some ways but very limited. However, don't expect me to give away professional secrets here -- after all, that is what I sell.

In any case, there is no one answer that works for all. What can be done, if anything, depends on the person's entire tax profile. So, solutions have to be developed for each individual.

[CWMcMurray]

What about the child tax credit or the earned income tax credit?

My Thai salary is plenty for me to live on here but it is not much by American standards.

This will be my first year working here and my daughter was also born born this year and I want to know what I need to do in order to keep things legal and what my tax burden will be and if I may infact qualify for any of the credits even though I am not living in the US.