Foreign Employer In Thailand

[Due East]

I am a US citizen living in Thailand, and my employer is British. Does anyone know any source of information about how the US government treats a situation like this?

For example, I know I am not required to pay US Social Security taxes.

But are there any tax-advantaged retirement schemes (similar to a 401(k) or Keogh) that apply to people in such situations, other than IRAs? I don't have a US employer to set up and make a retirement contribution to a 401(k) on my behalf, and I am not self-employed. Is there any other type of government-supported scheme that encourages retirement savings for people in my situation?

[kudroz]

Are you actually employed by the UK company or you are an independent contractor? If you are employed, taxes are being deducted at source by your employer and you must have a UK work permit, permanent residence or being the spouse of a UK national, etc.

If you are in-fact employed, as you suggest, your best bet would be to inquire with the company you work for regarding their pension plans, etc. You will have to file your taxes with the IRS but you can claim a tax credit or an itemized deduction for taxes paid to HM Revenue & Customs.

If you are not employed, then it just got a whole lot more complicated.

Edited December 2, 2007 by kudroz

[PeaceBlondie]

I'll try to guess the other possibility, and guess that you cannot claim IRA, Keogh, Roth IRA, or 401(k) deductions on foreign earned income. Perhaps Lanny or another expert who knows more will tell us.

Regarding the other possibility, that you are self employed in Thailand: you would be liable for SE tax, which would give you credits in the SS retirement, disability and survivor's benefits programs.

Your income earned in Thailand would probably be exempt from US income tax, up to about $88,000 per year, and income above that amount (which changes annually) would be eligible in part for a foreign tax credit.

Your entire earnings may be subject to Thai income tax; I wouldn't know.

[tjo o tjim]

There really isn't much of an advantage to using a 401k when you are an expat and taking the foreign tax exemption; your taxes are going to be lower when you earn the income than when you would take the money out. Just be disciplined and put the money aside for later.

If you just wanted to put money in a 401k out of principle, you would have to set up some sort of business with a solo-401k, declare income, pay social security plus self-employment tax on that income... and then declare a business loss... which ends up negating the benefit of the 401k contribution anyway.

[Due East]

There really isn't much of an advantage to using a 401k when you are an expat and taking the foreign tax exemption; your taxes are going to be lower when you earn the income than when you would take the money out. Just be disciplined and put the money aside for later.

If you just wanted to put money in a 401k out of principle, you would have to set up some sort of business with a solo-401k, declare income, pay social security plus self-employment tax on that income... and then declare a business loss... which ends up negating the benefit of the 401k contribution anyway.

Thanks to everyone for the useful feedback.