Do you declare your Thai teaching income to the tax authorities back home?

[ghworker2010]

I currently teach English on the 28k a month salary and the accountant is suggesting that I need to declare the income on my tax return in oz. All sources of overseas income are taxable under the ATO rules.

I have not decided if I will allow this on my tax return as I don't think that the tax authorities in oz talk to tax offices in Thailand. Thailand is too incompetent for this... would you agree?

Once I tell them that I'm earning money over here then I have to pay tax for a long time to come. I don't agree that I should have to pay tax to the oz nanny state government on in services I'm providing in Thailand.

Is tax being deducted from my salary each month? I work in a government institution and do not receive a monthly pay slip. After reading some comments I will go and speak to the accounts dept to investigate.

cheers

[stubuzz]

currently teach English on the 28k a month salary

Unless you are working part time, you need to demand a pay rise. It is well below the average.

[lostinisaan]

currently teach English on the 28k a month salary

Unless you are working part time, you need to demand a pay rise. It is well below the average.

I'm "making" 33 and I feel that I receive less than I should, for what I'm doing.

No time to Google it?

Wasn't it about Americans only, with their new law(s) which made( makes) it way harder to open up a bank account, etc?

Where're the Yankees?

[DogNo1]

We Americans have a foreign-earned income exclusion of $100,800 for 2015 earnings. I can't imagine that any teacher working in BKK would have to pay US tax. It's good to file every year though to avoid future problems. Also, if Thailand has a tax treaty with your country, your years of working in Thailand can count as credit toward social security benefits. I have no idea about Australia but would be very surprised if it didn't have a foreigh-earned income exclusion. You can probably Google Australia's equivalent of the IRS.

[bangmai]

The big change for Americans has been in opening bank accounts...they will actually give you some US IRS forms to sign. I think you would have to pay employment tax on it (probably possible) at 15.3% for it to count towards your 40 quarters of employment, which you do want to achieve, but if you are paying the employers share, too (7.65 x 2), you would be a lot better off with some dividend paying stocks.

[slipperylobster]

We are required to report foreign income...that is quite clear, and there are penalties for not reporting (if you get caught).

as far as the taxable amount..I have not kept up ...but should be some kind of info published online (tax charts, etc). I am sure teacher's salary here is quite under the poverty level....and no tax would be due. It is all about reporting. Of course, any other income could push your menial salary to a taxable level. In other words, an income of 12,000 a year is pittance, and back home, you would probably get a refund...not an "amount due:"

Every country is different....I am a from the USA.

Edited September 8, 2015 by slipperylobster

[bigt3116]

currently teach English on the 28k a month salary

Unless you are working part time, you need to demand a pay rise. It is well below the average.

28,780 is the basic salary and allowances for a Government university.

[SantiSuk]

If you were from the UK income at that level (unless you had significant alternative income like a full state pension or equivalent private pension) you would have little or no tax to pay anyway.

For the time being at least those who reside overseas (both those who have successfully declared non-resident status and those who have not bothered) have a personal allowance of GBP10,600*; that would mean you are not taxed on earned or pension income if in total together with investment/interest gross income it falls lower than that amount. Tax rate of 20% applies above that 10,600 amount (until the GBP 31,785 threshold between standard and higher rate (40%) is reached). UK basic rate tax is not penal by worldwide or even Thai standards, though clearly there are other worldwide locations that tempt you with minimal rates.

Even if you do end up being assessable or partly assessable to UK taxation on your Thai teacher's salary, if you are paying Thai tax then that can also be offset against any UK tax liability on that salary.

*equivalent of about $16,000 for info of non-Brits

{retired chartered accountant, conversant with, but not expert in, UK tax}

Edited September 9, 2015 by SantiSuk

[DavisH]

I'm Australian and have never declared my income to the OZ government. I pay tax here already. I'm not an Australian resident for tax purposes. The UK/US?CAN have different rules. The problem with the OZ system is because you are not resident there it cuts into the number of years you need to qualify for a pension. I'd need to go back now and work until I'm 70 just to get a full pension. I'm not willing to do that.

[DoctorG]

Last time I checked, your OS income is not taxable in OZ but must be stated and is used to work out your marginal tax rate on any OZ earnings, such as rental income, investments, etc.

[kinmaew]

If you have worked part year in AUS and then in Thailand as teacher and you declare Thai income the ATO will tax you for this that is what happened to me $800 tax on Thai income, better to keep it quiet no way ATO and Thai tax departments do any kind of link up

[Time Traveller]

For the US, technically you need to report it and they give you a tax free exemption on the first $95k of earned income if working offshore for the whole year. However, I doubt the IRS would chase you for tax on what is a probably a $770 a month cash in hand offshore job. If you were in the states you wouldn't pay tax on a low income like that.

For Australia, if you are not a tax resident in australia (eg living offshore full time), then you have no tax liable on that income. The only exception would be if you are claiming an Australian pension at the same time. Not declaring such income would be fraud.

Also, as mentioned Australians working offshore on such low salaries need to be aware that time spent outside of Australia reduces the amount you will get paid if you qualify for old age pension. So really Aussies need to ask themselves what benefit is there working in a 28k baht a month job - less than what welfare pays - when at the same time it reduces the amount they will ever be able to claim in welfare later in life.

[asdecas]

As far as I know, the US is the only developed country that pursues its citizens for tax on earnings made ex-residence, though I suppose one could argue that Australia is scarcely developed....

There is absolutely no exchange of domestic tax information between countries, the recent, outrageous FATCA imposition by the US IRS on foreign banks excepted, so why would you even think of declaring your paltry Thai income, which in any case would be far, far below any taxable threshold in Oz.

[sometimewoodworker]

If you were from the UK income at that level (unless you had significant alternative income like a full state pension or equivalent private pension) you would have little or no tax to pay anyway.

For the time being at least those who reside overseas (both those who have successfully declared non-resident status and those who have not bothered) have a personal allowance of GBP10,600*; that would mean you are not taxed on earned or pension income if in total together with investment/interest gross income it falls lower than that amount. Tax rate of 20% applies above that 10,600 amount (until the GBP 31,785 threshold between standard and higher rate (40%) is reached). UK basic rate tax is not penal by worldwide or even Thai standards, though clearly there are other worldwide locations that tempt you with minimal rates.

Even if you do end up being assessable or partly assessable to UK taxation on your Thai teacher's salary, if you are paying Thai tax then that can also be offset against any UK tax liability on that salary.

*equivalent of about $16,000 for info of non-Brits

{retired chartered accountant, conversant with, but not expert in, UK tax}

FWIW. As a nonresident British citizen I only have to pay tax and declare income earned in the UK to HMRC, which I do, I have no requirement to declare or pay UK tax on any income earned outside the UK, I have non UK income which do not declare.

Disclaimer: your tax status maybe different from mine.

Edited September 9, 2015 by sometimewoodworker

[oztaurus]

If you live outside of Australia for a certain amount of time each year you can be classed as "not a resident for income tax purposes" - which, from memory, means that you are only liable for tax in the country where you are living and working and not for Australian income tax.

I returned to Oz 6 years ago after 8 years away, filled in a bunch of back tax returns with $0 income in Oz and "not a resident for income tax purposes" on every form - all cleared, no questions asked.

[JimHuaHin]

I'm Australian and have never declared my income to the OZ government. I pay tax here already. I'm not an Australian resident for tax purposes. The UK/US?CAN have different rules. The problem with the OZ system is because you are not resident there it cuts into the number of years you need to qualify for a pension. I'd need to go back now and work until I'm 70 just to get a full pension. I'm not willing to do that.

I agree with your comments about the Oz pension.

At 57 I took a generous early retirement package from work in Oz 2 years ago and moved here on a retirement visa.

Am in the process of doing my 2014-2015 tax now ... and have noticed a few very very annoying things.

If you are not in Ozland for half the year, you are classed as a non-resident for tax purposes (even if you have lived in Australia all your life). This sucks, as you have to pay tax on all your income, no $18,000-odd tax-free threshold; you are not allowed to claim any medical expenses; you are not allowed to claim any dependent deductions; etc.

There is a dual taxation agreement between Thailand and Australia; but even though ATO web site notes this, I have been unable to find a copy of the agreement.

I know some Australians here, both retired and working here, who have declared that they are Australian residents for Australian taxation purposes (so they pay less tax). Technically this amounts to tax fraud, and if they are caught .... in theory the ATO can access their assets in Australia (see - http://www.hayesknight.com.au/archives/3137), including super. Of course, if you have no assets in Australia, then the only way the ATO will 'punish' you is if Australia applies to Thailand for your extradition back to Australia (see - https://en.wikipedia.org/wiki/Extradition_law_in_Australia). My guess if you owe the ATO a few thousand A$ they may not worry, a few hundred thousand $A ... ummm.

Remember that when you leave and return to Australia, that information goes into the immigration dept. computer database, which the ATO can access. If you have dual nationality and two passports, you maybe be able to 'fool' the system.

[JetCruza]

There is a double taxation agreement between Australia and Thailand. Basically this means that if you pay tax on your Thai earnings to the Thai tax office, you then do not need to pay any tax to the Australian Tax Office (ATO). Likewise, if you pay tax on your Australian earnings (if any) to the ATO, you do not owe any tax to the Thai tax office. Don't give up your Australian tax residency status just to avoid paying tax - do some research and there is plenty of relief for Aussies who work overseas in countries that have these tax agreements with Australia.

[Pdavies99]

So you are a retired accountant, yet you do not even mention double taxation treaties???

If you were from the UK income at that level (unless you had significant alternative income like a full state pension or equivalent private pension) you would have little or no tax to pay anyway.

For the time being at least those who reside overseas (both those who have successfully declared non-resident status and those who have not bothered) have a personal allowance of GBP10,600*; that would mean you are not taxed on earned or pension income if in total together with investment/interest gross income it falls lower than that amount. Tax rate of 20% applies above that 10,600 amount (until the GBP 31,785 threshold between standard and higher rate (40%) is reached). UK basic rate tax is not penal by worldwide or even Thai standards, though clearly there are other worldwide locations that tempt you with minimal rates.

Even if you do end up being assessable or partly assessable to UK taxation on your Thai teacher's salary, if you are paying Thai tax then that can also be offset against any UK tax liability on that salary.

*equivalent of about $16,000 for info of non-Brits

{retired chartered accountant, conversant with, but not expert in, UK tax}

[Harveyg]

My US tax guy recently informed me that there was a penalty for not reporting my teaching income(34k/mo, 11 mos).

He said the income is added to my pension and rental income and then my taxes are reduced by the amount of tax I pay in Thailand required every year.

I'll be trying to verify his info and find out more about likelihood of getting caught, and then make a decision about reporting it for 2015.

On a related note, I wanted to open a $ acct at BKK bank but when they give me the forms asking for my SS # I got cold feet. I'm not sure I want the U.S. to know where I am.

Am I being naive? The passport has the info. If they wanted to find out. But I think I'm small potatoes.

Any insight or advice re this aspect of expat ness? I may be contacting an American lawyer in bkk for input.

Thx in advance.

[gerry123]

oz talk to tax offices in Thailand. Thailand is too incompetent for this... would you agree? No stupid boy

[nithisa78]

Its your call. Break the law or comply. It isn't at all about how you feel.

Pay now or 1000x's over at some future and most likely critical time.

[Rocketsurgeon]

Does anyone know what forms to file for teachers income for US taxpayer?

I presume 1099 Misc? I'm also concerned there may be other issues like should have filed quarterly, need to pay taxes other than federal such as employer ss tax, self ss tax, whatever else.

2015 I will only have srven mos income plus dividend...but must file as going to move back to usa with wife 2016.

[BKKSnowBird]

Does anyone know what forms to file for teachers income for US taxpayer?

I presume 1099 Misc? I'm also concerned there may be other issues like should have filed quarterly, need to pay taxes other than federal such as employer ss tax, self ss tax, whatever else.

2015 I will only have srven mos income plus dividend...but must file as going to move back to usa with wife 2016.

If you are employed as an employee why would you pay self employment tax? I am not sure you can pay even if you wanted the credits toward retirement but curious if anyone knows.

I filed a 1040 and reported my teaching income with 2555ez. No tax was due on my small income but curious about social security tax. My social security record shows $0 for those years since my Thai wages are not covered. Some contries allow you to earn US SS credits. My employer didnt even pay Thai SS for me. My underdtanding is it depends on what type of school you work at.

Edited September 9, 2015 by BKKSnowBird

[DogNo1]

According to the ATO website, Australian citizens who are residents of a foreign country do not have to report their foreign earnings. Here's a link:

https://www.ato.gov.au/individuals/international-tax-for-individuals/work-out-your-tax-residency/

Americans are not so lucky. They have to report their income no matter where they live but they are entitled to exclude the first $100,800 of their foreign-earned income. They are NOT entitled to a foreign tax credit for any amount that is not included in their AGI. If Form 2555 and Form 1116 are filled out correctly, the reduction in foreign taxes on Form 1116, Part 3, Line 12 will be 100% of the foreign taxes paid, leaving the foreign tax credit at zero. Apparently some people are ignoring this line and are attempting to take a credit for taxes not paid on the AGI. This may slip through, especially if the total amount of income is small, but if it is caught in an audit, the person can be forced to pay improperly deducted tax credits for ten years back, including interest. If that hits when people are retired, it could be a painful amount to pay and the IRS has incredible powers to seize your money from anywhere, including your bank account. Do you feel lucky?

Regarding the correct form on which to report foreign earnings, it is Form 4852, downloadable from the IRS website.

[willr]

Why would you tell anybody including your accountant.

[BKKSnowBird]

What about earning US social security credits as a teacher in Thailand? I am guessing it is not possible?

[DogNo1]

PS. For those who don't know where to put their foreign-earned income on Form 1040, it should be placed on Line 21 as a negative number, eg. -12,000.

[DogNo1]

In Japan, where I worked for 20 years, I had to pay into the Japanese National Pension system. My years of employment were used to qualify me for American SS but I didn't get credit for my earnings. My SS benefit is based on my earnings in America and my Japanese pension is based on my earnings in Japan. I don't know the details of the Thai-American tax treaty but I imagine that it works in a similar way. So the short answer is no, you can't earn US Social Security benefits for your work in Thailand. An exception would be if you spend part of the year in the US and are paid there by a company which deducts SS tax from your pay. The SSA doesn't allow self-insuring by citizens who live outside of the US. The alternative for US citizens who work abroad is to take out a personal pension, usually with an insurance company.

[Rhys]

A timing question.... we handle it all depending on the circumstance right.. Yanks.. if you want to pull "SSI" then keep up.. or take care at the end.. If you plan on using SSI..

Otherwise... many to some salaries.. don't qualify for filing 1040A...below the required amount

[Rhys]

My US tax guy recently informed me that there was a penalty for not reporting my teaching income(34k/mo, 11 mos).

He said the income is added to my pension and rental income and then my taxes are reduced by the amount of tax I pay in Thailand required every year.

I'll be trying to verify his info and find out more about likelihood of getting caught, and then make a decision about reporting it for 2015.

On a related note, I wanted to open a $ acct at BKK bank but when they give me the forms asking for my SS # I got cold feet. I'm not sure I want the U.S. to know where I am.

Am I being naive? The passport has the info. If they wanted to find out. But I think I'm small potatoes.

Any insight or advice re this aspect of expat ness? I may be contacting an American lawyer in bkk for input.

Thx in advance.

Federal taxes, welcome the addtional data... what about state?