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

[mrwebb8825]

When I left the states 14 yrs ago, poverty level was $15,500 in the states before you owed uncle sam and working overseas you needed to make more than $80,000 a yr before you owed taxes. My sister, who also did all my taxes back then, told me I didn't need to file anymore after I'd been here for 3 yrs because I didn't earn enough to declare and living overseas, also didn't qualify for the "poor people refund" either.

About 2 yrs later I recieved my elidgibility staement from the IRS stating that when I reach full retirement age (66 10 months) I would receive about $1,000 every month.

A question came up a couple of yrs ago so I sent an e-mail to the SS office in Manila and they told me all is well. Last yr I had to help the bank fill out their wonderful new "I'm An American So Screw With Me A Bit More" forms to open a new account.

As a teacher in the provinces, I doubt I'll ever earn $100,000+ a yr so I'm not too overly concerned with it. I'm sure someone will get a call or a letter addressed to me if anything ever changes. My ebassy knows where I am. My immigration office knows where I'm at. My local police friends know where I'm at and my bank knows where I'm at. So does the SS office in Manila.

[Harveyg]

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.

So it sounds like, since I'll never make 100k here, I will not pay tax on foreign earnings, and there seems no reason to tell anyone about it. Right?

[Rhys]

When I left the states 14 yrs ago, poverty level was $15,500 in the states before you owed uncle sam and working overseas you needed to make more than $80,000 a yr before you owed taxes. My sister, who also did all my taxes back then, told me I didn't need to file anymore after I'd been here for 3 yrs because I didn't earn enough to declare and living overseas, also didn't qualify for the "poor people refund" either.

About 2 yrs later I recieved my elidgibility staement from the IRS stating that when I reach full retirement age (66 10 months) I would receive about $1,000 every month.

A question came up a couple of yrs ago so I sent an e-mail to the SS office in Manila and they told me all is well. Last yr I had to help the bank fill out their wonderful new "I'm An American So Screw With Me A Bit More" forms to open a new account.

As a teacher in the provinces, I doubt I'll ever earn $100,000+ a yr so I'm not too overly concerned with it. I'm sure someone will get a call or a letter addressed to me if anything ever changes. My ebassy knows where I am. My immigration office knows where I'm at. My local police friends know where I'm at and my bank knows where I'm at. So does the SS office in Manila.

This is basically the same situation for me...

[BKKSnowBird]

When I left the states 14 yrs ago, poverty level was $15,500 in the states before you owed uncle sam and working overseas you needed to make more than $80,000 a yr before you owed taxes. My sister, who also did all my taxes back then, told me I didn't need to file anymore after I'd been here for 3 yrs because I didn't earn enough to declare and living overseas, also didn't qualify for the "poor people refund" either.

About 2 yrs later I recieved my elidgibility staement from the IRS stating that when I reach full retirement age (66 10 months) I would receive about $1,000 every month.

A question came up a couple of yrs ago so I sent an e-mail to the SS office in Manila and they told me all is well. Last yr I had to help the bank fill out their wonderful new "I'm An American So Screw With Me A Bit More" forms to open a new account.

As a teacher in the provinces, I doubt I'll ever earn $100,000+ a yr so I'm not too overly concerned with it. I'm sure someone will get a call or a letter addressed to me if anything ever changes. My ebassy knows where I am. My immigration office knows where I'm at. My local police friends know where I'm at and my bank knows where I'm at. So does the SS office in Manila.

This is basically the same situation for me...

Yes, if you have atleast 40 quarters (10 years) of work you can get social security at 62, 66 or 70.

Just keep in mind those statments telling you how much you will get assume you will work until retirement in a job covered by social security. The amount is based on your 35 highest years, so don't expect much if you spent many years working in Thailand.

This is one reason I returned to the US. I should be able to retire with almost 2k from SS in Thailand.

[DogNo1]

Harveyg: It doesn't sound as though you'll need to file until you begin to collect Social Security. Then you may need to file. Here's a link: http://www.irs.gov/uac/Do-I-have-to-File-a-Tax-Return%3F

[nellyp]

Ths is interesting. I am from the UK, and I have never declared my income, though I do fill in a self assessment tax return form every year as I have income from a UK property. I never actually pay any tax, and even if I declared my earnings in Thailand would not have to pay (I offset it against various expenses). I am, however, wondering how this could affect my national insurance contributions (which I would like to pay). If I declared foreign income, would they then ask me for NI contributions

[HooHaa]

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.

hardly a progressive occupation - base salary was 25 and change in 1997 as i recall.

Edited September 11, 2015 by HooHaa

[sometimewoodworker]

Ths is interesting. I am from the UK, and I have never declared my income, though I do fill in a self assessment tax return form every year as I have income from a UK property. I never actually pay any tax, and even if I declared my earnings in Thailand would not have to pay (I offset it against various expenses). I am, however, wondering how this could affect my national insurance contributions (which I would like to pay). If I declared foreign income, would they then ask me for NI contributions

If you are a nondom then you never have to declare non UK income. If you are still resident in the UK (that has little to do with where you live, but how many days you spend in the UK each year and other factors ) you must declare all income. As to NI you can, and should, make voluntary contributions, I do. They will be type 2 or 3 depending upon your status when you left the UK. You have a limited time to pay previous years and you need 35 years for a full pension.

[Scott]

A post with the comment only in the quote box has been removed along with a reply. Be careful to make sure your comment appears outside the quoted text.

[gk10002000]

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.

The problem with the foreign -earned income exclusion is the calendar or number of contiguous days you have to be out of the USA in order to qualify. The IRS goes by a tax year, so unfortunately if you started teaching from July through December, you would not qualify for the exclusion. I think it is 330 contiguous days or 11 months. something like that

[gk10002000]

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

Oh it is possible. Basically it involves Schedule SE, and probably Scheduel C. In fact a recent post in another forum involved one fellow that dearly wanted to contribute but had not paid when due, so there is a 25% penalty for late payment of Social Security taxes! Pretty stiff.

[BKKSnowBird]

But you are not really self emoloyed? You work for a school or an agency. You are saying they don't care and will let you pay?

If so, it would also keep you insured for SSDI in case you became disabled.

[ghworker2010]

For any oz teachers here in LOS the ATO does not require you to disclose foreign income and thus you will not have to report it on your tax return as there is a tax treaty that exists between the 2 countries

[DogNo1]

Americans must file an FBAR every year and include the FATCA in their income tax return. They are not screwed unless they make over the excludable limit or do not live abroad for long enough each year. In that event, the exclusion is prorated, not disallowed entirely. Rhys: your accountant should know that your foreign income should be reported along with your pensions then excluded by entering a negative amount equal to your foreign income on line 21 of Form 1040. Social Security payments and US sourced pensions and annuities are subject to US tax. The new trick is that all of your income is added together to determine your tax rate even though the foreign portion is later excluded. There actually a good explanation of Form 2555 on the irs.gov website.

[bangkokjulia]

The current tax free threshold in Australia is $18200. If this is your only income, you well and truly fall below said threshold.

[gk10002000]

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.

This important for USA citizens that work abroad. There is a very large allowance called foreign income exclusion ~ 100 K USD. The amount changes so check the latest. However, it is NOT pro-rated. You only qualify if you are outside the USA for 11 contiguous months or 330 days I think it is within the SAME calendar tax year. So if you start teaching in May, you would only have 7 or 8 months outside the USA and you would NOT be able to exclude any foreign income. The periods are only good for one tax year. You don't get credit for 6 months in one year, and 6 months in another. So when you start teaching can be very important if you want to be straight up. You nominally would have to do an extra tax form or two and then you have to or would want to get credit for and pay into social security, that is another form or two. And of course unless you live in a tax free state like FL, WA, TX, etc., you have to do the state thingy too.

[BKKSnowBird]

I don't think you can pay into social security as an employee in Thailand. If self employeed, ok.

The 100k exclusion is if you are out of the country for the required days. It does not have to be the tax year. It can be May to April.

[SheungWan]

IMHO, if the OP is working in Thailand with an official work visa, he should declare.

[Mencken]

Americans must file an FBAR every year and include the FATCA in their income tax return. They are not screwed unless they make over the excludable limit or do not live abroad for long enough each year. In that event, the exclusion is prorated, not disallowed entirely. Rhys: your accountant should know that your foreign income should be reported along with your pensions then excluded by entering a negative amount equal to your foreign income on line 21 of Form 1040. Social Security payments and US sourced pensions and annuities are subject to US tax. The new trick is that all of your income is added together to determine your tax rate even though the foreign portion is later excluded. There actually a good explanation of Form 2555 on the irs.gov website.

This is not correct, one only need file having on deposit overseas and in total (sum) over usd10k. The fbar firm now needs to be filed prior to Apr 15, not in June as prior.

Further, you email your fbar you for nt include it in your return. Different agency altogether.

Edited October 31, 2015 by Mencken

[Mencken]

What forms would be filed related to teaching income for us tax donkeys?

1099 misc?

What addl taxes/forms?

What about paying SS taxes? I won't pay State and doubt will be over threshold for Federal as I anticipate no or minimal tax liability due to nature of investments in US.

I'm only filing bcz I had to fill out forms for new job, e.deposit. I'm also thinking about going back.

If you have to file, consider just filing at your domicile in US, that's what I did for back files. Saves paperwork and headaches assuming you are under threshold.

Note: most teachers are making above poverty threshold, up to you to file. If you file US domicile you would be subject to minimal taxes, SS, etc...which means paying and maybe even paying penalties for being late. If filing overseas...you are exempt but there are criteria. Personally, I would not worry about back taxes on overseas but who knows the IRS. My thinking is, write "annual income 12mos" on the 1099 and file with Thai address. They might come after you sure, but think about it...

The energy IRS will depend to get how much from you, even with penalties? They have fat fish with big money seriously screwing them. I just don't see them giving grief to some poor guy who went abroad in a sour job market making supermarket wages. Just the correspondence between you two could leave the case open years. For what? Literally two hundred bucks?

If I had nothing going on in US, no need to fbar, only income teaching here. I wouldn't file personally, but I sure wouldn't file and exclude full years income. Sheeeit IRS agent prolly feel sorry for you u making 30k a month.

US might also have tax reciprocal agreement with Thailand nwhich would lower your taxes (maybe not your SS).

IRS isn't going to go after a bunch of broke ass teachers living abroad lol.

Fifty K is different imo but even then, if you are living abroad, no money or assets at home govt isn't going to give you grief.

You could be at home on your ass not working like 93M other Americans and potential govt dole liability.

Just do the right thing.

Finally, if you are planning to go home (which given there is no future here is a good idea), might not be a bad idea to continue to file.

Edited October 31, 2015 by Mencken