American taxes due - or are they?

[lanny]

U.S. income tax returns are due April 15.  A foreign (Thai) post mark is acceptable but IRS may have to be reminded of this.

On the other hand, if you live here, you have an automatic extension of time to file AND PAY, until June 15.  Just remember at attach a statement to your return giving this information.

[dazdaz]

Is it upto the individual or the company to let the IRS (If your American) or Inland Revenue (If your British), know your earning abroad?

I've never fully understood the double taxation treaty.

Thx

[jonniebkk]

Better check the fine print...it is my understanding that the automatic extension applies to the last day to FILE the return only.  Any taxes owed are due and payable on April 15th.

So in effect, unless you are sure you will receive a refund or paid in estimated taxes an amount at least as much as your prior year's actual tax, one must complete the return by mid-April like everyone else.

[dazdaz]

Whoa, hold your horses friend, too much accountant speak.

Are you saying that it's the responsibility of the expatriate to file their tax return in their home country, not the company on the income earned in the overseas country their working?

Cheers.

[lanny]

Well, let me see if I can answer these questions.

First, the tax treaty between the U.S. and Thailand really does not apply to expats living here.  See the earlier post on the treaty.

The automatic extension for those living out of the U.S. is different than other extensions.  Unlike most extensions, which are only extensions of time to file the return, the expat's extension does give you an extra 60 days to pay. IRS will charge interest but not penalty.

I can't speak to British taxes, I'm a U.S. C.P.A., not a C.A. and don't know British tax law.  But, for American expats, the answer is yes, it is the responsibility of the individual to report his income to IRS each year.  The fact that one lives outside the U.S. does not relieve one of the requirement to file a return and to pay any tax due.

[jonniebkk]

So in practical effect, they are due and payable on April 15 or an interest "penalty" will be charged.  

I should know, I have been filing tax forms from Bangkok for the past 4 years.  The IRS is even "helpful" enough to send a representative to the embassy every year around tax time to answer any tax related questions American expats may have.

[JasonFieber]

Lanny,

The rule still applies that you have to make a minimum amount of money before you have to file correct?  I broke my arm last year and only made 2,000 from my job.  I went to H&R Block to file but they just said I'd be better off not to file, since the returns would barely cover the cost to file through their agency lol.  So to make my long story short, this rule still applies even if you are living abroad correct?  

Thanks for the help friend.

[lanny]

First, for Jason.

The usual filing requirements apply, regardless of where you are and they are based on total income, not just salaries and wages.  Depending of filing status (single, married, etc.) you don't have to file as long as your income is less than this minimum.

This is NOT the $80,000 exclusion for income earned outside the U.S.  You must file a return go claim that exclusion.

For jonniebkk

It is not a penalty, you have use of the money for 60 days and IRS will charge interest for that period.  Without the special expat extension, a payment made on 6/15 would be charged a late payment penalty of 1.5%, a late filing penalty of 13.5%, plus interest on the entire amount!  So, if you had to pay $1,000, for example, the penalties and interest would be something like $150.  With the extension, you have to pay them about $12.

[dazdaz]

I asked someone who claimed you don't do any filing if your from the United Kingdom, although I still don't think this is 100% reliable.

???

[abjinthai]

Oh my...American and have been here for almost 11 years and never paid any taxes to the IRS...But I only receive 25,000Bt salary here. Even less a few years ago.

Does anyone know how much I may owe? :ghostface:

[ThaiAdventure]

I asked someone who claimed you don't do any filing if your from the United Kingdom, although I still don't think this is 100% reliable.

???

I'm afraid you do (if you are considered a UK resident).

There is the self assesment tax form that has to be completed each year. You have to obtain the extra pages for overseas income (Form SA106) within which you have to delare any income from property, land, pensions and "arising" income i.e wages. If you are not resident in the UK you have to declare this BEFORE living abroad.

You declare the tax in the UK and they "relieve" the tax paid in Thailand. At the back of form SA106 there is a scale (20% for Thailand). This is the maximum that the Thailand authorities are allowed to tax you according to the Double Taxation Agreement. So. I pay 20% in Thailand, 2% in the UK making a total of 22% (UK taxation in the mid band).

There are a couple of tricks that you can do, however, like taking dividends instead of income!

[dazdaz]

>If you are not resident in the UK you have to declare this BEFORE living abroad.

How do you declare this?  I've wondered this for some time. Useful for others to know.  A list of things needed to be done before departing.

Regards

[ThaiAdventure]

Use forms P85 or P85(s).

See below.

http://www.inlandrevenue.gov.uk/cnr/r_and_d.htm

[dazdaz]

Anything else you have to do before leaving the UK?

Regards

[mrvietnam2001]

abjinthai The news today was they convicted one of those "evil" people who didn't pay the king's extortion, and they locked him up! After he gets out, he has to pay. Unsure whether or not the interest and penalties accrue while he's breaking big rocks into little rocks.

If you've made it , then you've made it!

Watch it though, they may start sending drones to collect the kings upcoming email tax soon!

[ThaiAdventure]

Anything else you have to do before leaving the UK?

Regards

You also have to figure out if you will still have to pay NIC to the UK. This is VERY important for pensions.

See link below:http://www.inlandrevenue.gov.uk/cnr/osc.htm#1

[dazdaz]

I'm really glad you brought that subject up because nobody talks about it and yet it's one of the most important topics!  If you live in Thailand for 20 years and you don't pay a UK  or Thai pension, you sure don't want to leave so you'll have to find a way to contnue working.  It's a little scary, especially when incomes are so low in Thailand.

I wonder what the TEFL people on low pay(low for UK) do?  Do you just ignore it, and hope you won't get old?  ::

I don't understand this topic though.  Do you pay into the Thai social security scheme which is then reconverted into National Insurance?  Could you then withdraw a UK Pension but still live in Thailand?  It's confusing to say the least.

Can I ask, what you do for a pension?

Regards

[mrvietnam2001]

I'm developing a small business on the net. Unfortunately, as a near total neophyte in this area, I was ripped off by my American web designers to the tune of 35,000.00 USD along with losing almost 26 months of income while living in Saigon, Vungtau, and Koh Samui. ( and I live in nice places, so the monthly losses came to over 100K in addition to the "net" designers cost!)

But you know the thing is actually starting to bring in about 1K a month despite all the problems and in my humble opinion, if and when I find an honest web person to work with at a decent cost factor, I believe the thing can show me 2-3K a month after a while and be consistent at that. You know and I know that spells a pretty good lifestyle whether it's Thailand or anywhere else ( check out the islands in......oops not yet:) ) in Asia.

One of the keys is to have it set up so that the actual ecommerce goes into an account ( or accounts) in a different place which makes it out of reach to the locals. Hence from a fiancial perspective., you reach PT status, ( permanent traveller, practically transparent, etc)

Unfortunately, the losses forced me to return to the land of the "free" ( ahem) but on the other hand this place gives me the shot at correcting the errors pretty quickly, although am definitely back on the treadmill here in order to do so.

I think it's do-able to a point where you don't need to rely on that "pension", but in effect create your own......creatively.

Now to find a realistically priced web person, who wants to establish a long term professional relationship and who has the knowledge to make it happen from a technological point of view. If you stumble across one, please let me know.

Hope I've been helpful, even in a small way.

Regards

Mr Vietnam  

[ThaiAdventure]

I'm developing a small business on the net. Unfortunately, as a near total neophyte in this area, I was ripped off by my American web designers to the tune of 35,000.00 USD

How did they do it?

What did the authorities say?

I think we could all learn a lesson here!

[ThaiAdventure]

DazDaz Wrote:

>Do you just ignore it, and hope you won't get old?  

I wouldn't. The government take enough money from you... Don't give them any more! You have paid your dues and so are entitled to the rewards.

DazDaz Wrote:

>I don't understand this topic though.  Do you pay into the >Thai social security scheme which is then reconverted into >National Insurance?  Could you then withdraw a UK Pension >but still live in Thailand?  It's confusing to say the least.

I haven't looked too deeply at it because I do not intend to live in Thailand....yet! There is an address on the link that you can contact where they will answer all your questions. I think it is one of those situations where each case requires different advice.

DazDaz Wrote:

>Can I ask, what you do for a pension?

No.

[mrvietnam2001]

ThaiAdventure, they just didn't do what they were supposed to. I did in fact file a complaint and am going to sue one of them, but that doesn't do a thing in the short term.

Rgrds

TP

[lanny]

For abjinthai

Sorry, I've been away from this forum for a few days and missed your post.  

If you haven't earned more than the exclusion amount (it has increased from $70,000 a few years ago to $80,000 now) you probably won't owe anything.  However, you need to file returns for at least the last 5 years to keep IRS happy.  If, for any reason, they come looking for you, you cannot now claim the exclusion for anything other than the last two years.  That could cost you a lot, considering penalties and interest.

The rule is that you must file your return within one year of the normal due date to claim the exclusion.  If you file after this, the IRS may allow the exclusion if you do not owe anything after claiming the exclusion.  You must also claim the exclusion before the IRS asks for or examines a return.

[Anuten1999]

So in practice, they are due and paid on April 15 or charged a fine of "interest".

I should know I have filed a tax form from Bangkok over the last 4 years. The IRS even "helpful" enough to send an agent to the embassy every year during the tax period to answer any questions about taxes related to foreigners that America may have. สูตรเด็ดแทงบอลเต็ง

[bwpage3]

No this year the due date for taxes in the US was moved to July 15th. You were not required to file in April.