Do USA citizen need to pay tax in Thailand?

[returnofthailand]

I am not a resident of Europe, I m a EU citizen making me off radar for income tax in Europe as I don't reside in Europe.

how does it work for Americans? . if you make some money in the USA and you live in Thailand, can you avoid pay tax at all. (legally) like me.

do you have to pay tax to your uncle Sam if you don't pay tax in Thailand.?

[beachproperty]

My life is sooooo good, I don't pay taxes. I save money by the boatload...I spend so little its hard to open my wallet. By the way ....why do you care if your an EU citizen?

Edited June 17, 2016 by beachproperty

[daveAustin]

After the Brits kicked themselves out due to overzealous collection of taxes in the new world, the now Yanks have gone one step further in making their citizens pay tax on worldwide income... that's why lots come here and hide.

Apparently Boris Johnson is being chased by the IRS for taxes earned overseas because he was born in the States.

[Pib]

US citizens pay tax regardless of country you may go live in, but there are exemptions for foreign earned income in case you are working and paying taxes in another country. Move to the Moon and you will still be subject to U.S. federal income tax. Yes, if you are an American citizen who lives in Thailand like many retirees do (such as myself) you still pay U.S. taxes just as if you were living in the U.S. But you do not pay double taxes just because you are living and working in another country....you won't pay tax twice (i.e., to each country) on the same money earned. Now of course it does get more complicated than that but generally that's how it works.

Here's a partial quote from the U.S. Internal Revenue Service

https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion

If you are a U.S. citizen or a resident alien of the United States and you live abroad, you are taxed on your worldwide income. However, you may qualify to exclude from income up to an amount of your foreign earnings that is adjusted annually for inflation ($92,900 for 2011, $95,100 for 2012, $97,600 for 2013, $99,200 for 2014 and $100,800 for 2015). In addition, you can exclude or deduct certain foreign housing amounts.

Now in terms of benefits paid like old age pension/social security pension that is paid to you worldwide without reduction unlike other countries which will not pay old age pension once you move out of your home country. Or maybe deny you government managed medical care such as Medicare Part B as long as you have been paying the Part B premiums (Medical Insurance)...step foot back in the U.S. today and go get immediate medical care under Part B as long as you have been paying your premium while living overseas. And ditto for the Medicare Part A (Hospital Coverage) which is free. Once again, apparently in some other countries you have to reestablish residence before you can get fully get coverage under your government's medical care program. And if you are retired U.S. military and pay your Part B premium you can continue to use Tricare for Life anywhere in the world for your medical care....if you don't pay the Part B premium you lose the Tricare Coverge for Life at age 65.

Yeap, Uncle Sam pretty much don't care where you live in the world...you still pay taxes to him minus any foreign income exemption you may qualify for and generally he will continue to pay and provide most benefits, such as old age pension, regardless of where you life in the world.

[thrilled]

If you put money in A bank in thailand over $10,000 If your an American citizen.If you don't notify the IRS will give you A heavy fine.

And yes Supposely the Thai banks will notify the IRS about the money.Uncle Sam gets his no matter what.

[anotheruser]

As far as people living under the poverty line you don't need to file. Don't worry you will continue to win everyday.

[SantiSuk]

Why is everyone telling the guy what the position is for US citizens? I know he sort of asked but he also seems to be confused! I read it as that he wishes to remain a Thai citizen but will maybe earn some money in the US.

I don't have answers myself if that is the question but I do know he would not be liable to Thai taxation on foreign income unless that income is remitted to Thailand in the same calendar year as it is earned (maybe 'paid' - not sure whether earned or paid is the right measure).

Putting it differently. He would be potentially liable to Thai taxation if he remits earnings/receipt of earnings from the US in the same calendar year. Note I say potentially. Whether he would pay taxes in Thailand on those remittances would depend on:

* the workings of any double taxation agreement between US and Thailand. I would imagine there is such an agreement in place but how it works would be for others with personal experience or expertise to advise.

* The level of such income and other income he may have elsewhere or in Thailand that would fall to be taxable in Thailand. Total income that is taxable in Thailand would need to be stacked up against total taxation allowances in Thailand to determine whether taxation is potentially payable in Thailand. Total taxation potentially payable would then be reduced by any taxation paid overseas that is permitted to be knocked off the Thai tax bill by dint of relevant double taxation agreements.

No quick easy answers to questions on cross - border taxation! Have not addressed any tax planing issues that might reduce total taxes in such situations for someone with significant cross - border earnings. That always needs qualified advisers or tons of research by the taxpayer.

[returnofthailand]

I m taxed based on residence, and not on citizenship. this is why I mention I m a EU resident.

all money I make is from Europe mainly, and as I m a tourist here with a tourist visa in Thailand and never stay longer than 3 months consecutively, I don't have to report anything. it s like I m living on the moon or in international waters. that s the nice thing to tax on residence Vs citizenship.

I heard USA is the only country with etria who tax on citizenship. maybe these 2 countries should unite together and make one flag for both (sarcasm).

my life is sweet. this is years I have not filed any tax report and the money is still raining on my account.

Edited June 18, 2016 by returnofthailand

[wwest5829]

US citizens pay tax regardless of country you may go live in, but there are exemptions for foreign earned income in case you are working and paying taxes in another country. Move to the Moon and you will still be subject to U.S. federal income tax. Yes, if you are an American citizen who lives in Thailand like many retirees do (such as myself) you still pay U.S. taxes just as if you were living in the U.S. But you do not pay double taxes just because you are living and working in another country....you won't pay tax twice (i.e., to each country) on the same money earned. Now of course it does get more complicated than that but generally that's how it works.

Here's a partial quote from the U.S. Internal Revenue Service

https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion

If you are a U.S. citizen or a resident alien of the United States and you live abroad, you are taxed on your worldwide income. However, you may qualify to exclude from income up to an amount of your foreign earnings that is adjusted annually for inflation ($92,900 for 2011, $95,100 for 2012, $97,600 for 2013, $99,200 for 2014 and $100,800 for 2015). In addition, you can exclude or deduct certain foreign housing amounts.

Now in terms of benefits paid like old age pension/social security pension that is paid to you worldwide without reduction unlike other countries which will not pay old age pension once you move out of your home country. Or maybe deny you government managed medical care such as Medicare Part B as long as you have been paying the Part B premiums (Medical Insurance)...step foot back in the U.S. today and go get immediate medical care under Part B as long as you have been paying your premium while living overseas. And ditto for the Medicare Part A (Hospital Coverage) which is free. Once again, apparently in some other countries you have to reestablish residence before you can get fully get coverage under your government's medical care program. And if you are retired U.S. military and pay your Part B premium you can continue to use Tricare for Life anywhere in the world for your medical care....if you don't pay the Part B premium you lose the Tricare Coverge for Life at age 65.

Yeap, Uncle Sam pretty much don't care where you live in the world...you still pay taxes to him minus any foreign income exemption you may qualify for and generally he will continue to pay and provide most benefits, such as old age pension, regardless of where you life in the world.

Great coverage of the issue and you saved me from having to write anything. Very clear and correct. My compliments!

[sanukjim]

All Americans from thee US are subject to taxes on all incomes.I pay taxes on my retirement from American Airlines.If working outside the US I am allowed a $90,000.00 exemption tax free then still pay taxes over that.It is a law in the US that all citizens (whither residing in or out of the US) must file an income tax form and send it to the proper tax office every year..Many don not but some day the "Grim Reaper " of the tax office may get you and you will be paying a lot in penalties $$$.

[sanukjim]

If you are a UK citizen you should check HMG forms P85 and IP120. As most UK citizens are taxable while living out side of the country..Do not believe what you hear from people that "knows" read the forms.

[gandalf12]

After the Brits kicked themselves out due to overzealous collection of taxes in the new world, the now Yanks have gone one step further in making their citizens pay tax on worldwide income... that's why lots come here and hide.

Apparently Boris Johnson is being chased by the IRS for taxes earned overseas because he was born in the States.

As do the Canadians

[partington]

If you are a UK citizen you should check HMG forms P85 and IP120. As most UK citizens are taxable while living out side of the country..Do not believe what you hear from people that "knows" read the forms.

Uk citizens are only taxed on money arising inside the UK when non-resident in the UK, and, if away for five years or more, are not even charged capital gains tax on assets like shares sold within the UK (with the exception of houses-the law changed this year to make non-residents liable for cap gains tax on property, but only on increases in value from April this year).

Also, if UK citizens are non-resident and not claiming the personal allowance, bank and bond interest and share dividends are not taxed at all even when arising in the UK.

A very advantageous tax situation to anyone with retirement investments!

[sas_cars]

US citizens pay tax regardless of country you may go live in, but there are exemptions for foreign earned income in case you are working and paying taxes in another country. Move to the Moon and you will still be subject to U.S. federal income tax. Yes, if you are an American citizen who lives in Thailand like many retirees do (such as myself) you still pay U.S. taxes just as if you were living in the U.S. But you do not pay double taxes just because you are living and working in another country....you won't pay tax twice (i.e., to each country) on the same money earned. Now of course it does get more complicated than that but generally that's how it works.

Here's a partial quote from the U.S. Internal Revenue Service

https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion

If you are a U.S. citizen or a resident alien of the United States and you live abroad, you are taxed on your worldwide income. However, you may qualify to exclude from income up to an amount of your foreign earnings that is adjusted annually for inflation ($92,900 for 2011, $95,100 for 2012, $97,600 for 2013, $99,200 for 2014 and $100,800 for 2015). In addition, you can exclude or deduct certain foreign housing amounts.

Now in terms of benefits paid like old age pension/social security pension that is paid to you worldwide without reduction unlike other countries which will not pay old age pension once you move out of your home country. Or maybe deny you government managed medical care such as Medicare Part B as long as you have been paying the Part B premiums (Medical Insurance)...step foot back in the U.S. today and go get immediate medical care under Part B as long as you have been paying your premium while living overseas. And ditto for the Medicare Part A (Hospital Coverage) which is free. Once again, apparently in some other countries you have to reestablish residence before you can get fully get coverage under your government's medical care program. And if you are retired U.S. military and pay your Part B premium you can continue to use Tricare for Life anywhere in the world for your medical care....if you don't pay the Part B premium you lose the Tricare Coverge for Life at age 65.

Yeap, Uncle Sam pretty much don't care where you live in the world...you still pay taxes to him minus any foreign income exemption you may qualify for and generally he will continue to pay and provide most benefits, such as old age pension, regardless of where you life in the world.

Pib, suppose I am a US citizen living and working in Thailand, I make 200,000 $/year here of which is already taxed by thai government. What amount will I be declaring to the US IRS and what tax will I owe them? Even though my income has already been taxed by Thai govt.

[MyFriend You]

If you put money in A bank in thailand over $10,000 If your an American citizen.If you don't notify the IRS will give you A heavy fine.

And yes Supposely the Thai banks will notify the IRS about the money.Uncle Sam gets his no matter what.

You must file the FBAR Form for any deposits over $10,000.

[vaultdweller0013]

US citizens pay tax regardless of country you may go live in, but there are exemptions for foreign earned income in case you are working and paying taxes in another country. Move to the Moon and you will still be subject to U.S. federal income tax. Yes, if you are an American citizen who lives in Thailand like many retirees do (such as myself) you still pay U.S. taxes just as if you were living in the U.S. But you do not pay double taxes just because you are living and working in another country....you won't pay tax twice (i.e., to each country) on the same money earned. Now of course it does get more complicated than that but generally that's how it works.

Here's a partial quote from the U.S. Internal Revenue Service

https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion

If you are a U.S. citizen or a resident alien of the United States and you live abroad, you are taxed on your worldwide income. However, you may qualify to exclude from income up to an amount of your foreign earnings that is adjusted annually for inflation ($92,900 for 2011, $95,100 for 2012, $97,600 for 2013, $99,200 for 2014 and $100,800 for 2015). In addition, you can exclude or deduct certain foreign housing amounts.

Now in terms of benefits paid like old age pension/social security pension that is paid to you worldwide without reduction unlike other countries which will not pay old age pension once you move out of your home country. Or maybe deny you government managed medical care such as Medicare Part B as long as you have been paying the Part B premiums (Medical Insurance)...step foot back in the U.S. today and go get immediate medical care under Part B as long as you have been paying your premium while living overseas. And ditto for the Medicare Part A (Hospital Coverage) which is free. Once again, apparently in some other countries you have to reestablish residence before you can get fully get coverage under your government's medical care program. And if you are retired U.S. military and pay your Part B premium you can continue to use Tricare for Life anywhere in the world for your medical care....if you don't pay the Part B premium you lose the Tricare Coverge for Life at age 65.

Yeap, Uncle Sam pretty much don't care where you live in the world...you still pay taxes to him minus any foreign income exemption you may qualify for and generally he will continue to pay and provide most benefits, such as old age pension, regardless of where you life in the world.

Pib, suppose I am a US citizen living and working in Thailand, I make 200,000 $/year here of which is already taxed by thai government. What amount will I be declaring to the US IRS and what tax will I owe them? Even though my income has already been taxed by Thai govt.

You would report $200,000 income on your taxes, but you would pay tax on the $92,000 over the foreign earned income exclusion of $100,800 ($200,000 - $108,000 = $92,000). The exclusion is not a deduction, so it is taxed at the higher brackets, 28% for $108,000 to $189,300 and 33% for $189,301 to $200,000. However, you are able to apply other deductions and credits to reduce the amount owed. First, you would take the standard deduction of $6,300, reducing the taxed amount to $87,500. Then, in particular, you can take a non-refundable credit for foreign tax paid. Given that the Thai 30% tax bracket starts at $60,000 and the 35% bracket around $100,000. You would have almost certainly paid more tax to Thailand on the $108,000 to $200,000 part of your income than was owed to the US. As such, the credit for the tax paid to Thailand would reduce your tax to $0 (its not refundable like the earned income tax credit, so you don't get any money back).

At least that is my understanding. Personally, I take a deduction for housing costs instead of the foreign tax credit because it is easier to fill in and still reduces my tax owed to $0. Although, the US tax code is complicated with things like the alternative-minimum-tax (AMT), which changes up which deductions and credits you can take, so you can only really be sure what is owed by looking at all the specific circumstances for each case.

[TallGuyJohninBKK]

If you put money in A bank in thailand over $10,000 If your an American citizen.If you don't notify the IRS will give you A heavy fine.

And yes Supposely the Thai banks will notify the IRS about the money.Uncle Sam gets his no matter what.

You must file the FBAR Form for any deposits over $10,000.

The FBAR reporting requirement for Americans is triggered when they/we have a TOTAL of ANY/ALL foreign financial account deposits that exceed $10,000 cumulatively at any point during the year.

The deposits can be in one account or many. Can be in Thailand alone or multiple foreign countries. If the total of all of them, wherever they are, exceeds $10,000 even for one day during the year, FBAR reporting is required.

--------------------------

And yes, Americans are required to report income earned in any country, no matter our residency status or living locations. It's been that way for many years, nothing new about that.

In general, the U.S. and Thailand have a reciprocal tax treaty. The theory of it is, income is supposed to only be taxed once, either in the U.S. or Thailand, at least up to some point. How any particular individual gets to that result is going to depend on individual circumstances, and can get pretty complicated in its execution.

Edited June 18, 2016 by TallGuyJohninBKK

[csabo]

[quote)

If you put money in A bank in thailand over $10,000 If your an American citizen.If you don't notify the IRS will give you A heavy fine.

And yes Supposely the Thai banks will notify the IRS about the money.Uncle Sam gets his no matter what.

You are referring to FBAR reporting and you are basically correct. If cumulative holdings are greater than 10k you must report it. There are exceptions. KTB called me in to the bank twice (they list the fist form) to complete a IRS W9 form notifying the US of my account here. BKK bank has not had me omelette the same form. Bottom line is I follow your rule of 10k or under. Re: income tax earned abroad if you are in the US 35 days (cumulative) or less and earned less than 100.8k you are not required to pay income tax on that income but you ARE required to report it via a 2555ez form. This is why Middle East American contractors are careful not to overstay in the US or they would be slammed with taxes.

[hvdkerkh]

I m taxed based on residence, and not on citizenship. this is why I mention I m a EU resident.

all money I make is from Europe mainly, and as I m a tourist here with a tourist visa in Thailand and never stay longer than 3 months consecutively, I don't have to report anything. it s like I m living on the moon or in international waters. that s the nice thing to tax on residence Vs citizenship.

I heard USA is the only country with etria who tax on citizenship. maybe these 2 countries should unite together and make one flag for both (sarcasm).

my life is sweet. this is years I have not filed any tax report and the money is still raining on my account.

Consecutive periods are not relevant. It's about the total aggregated amount of days in a (calendar) in Thailand.

If that exceeds 180, you must file by law.

http://www.rd.go.th/publish/6045.0.html states:

Taxpayers are classified into “resident” and “non-resident”. “Resident” means any person residing in Thailand for a period or periods aggregating more than 180 days in any tax (calendar) year. A resident of Thailand is liable to pay tax on income from sources in Thailand as well as on the portion of income from foreign sources that is brought into Thailand. A non-resident is, however, subject to tax only on income from sources in Thailand.

[aronp1]

You always need to file taxes each year, but actually "paying" taxes all depends on how much you've earned that year.

[Ondral]

I am a US citizen living in Thailand and I do not pay tax to the US government. I pay income tax to the government of Thailand because this is where I live and work. If the IRS wants my money they can come and try to get some.

[sanukjim]

After the Brits kicked themselves out due to overzealous collection of taxes in the new world, the now Yanks have gone one step further in making their citizens pay tax on worldwide income... that's why lots come here and hide.

Apparently Boris Johnson is being chased by the IRS for taxes earned overseas because he was born in the States.

The US has been taxing their citizens for a long time I was required to file US taxes in Japan in 1965 and have been doing it ever sense I have lived in Asia and the middle east.Living here in retirement A US citizen is still required by law to file a tax report every year.Money made outside the US is tax free to $95,000.00.but you still have to file.

Edited June 18, 2016 by sanukjim

[JLCrab]

I am a US citizen living in Thailand and I do not pay tax to the US government. I pay income tax to the government of Thailand because this is where I live and work. If the IRS wants my money they can come and try to get some.

If you live outside the USA 330+ days per year and make less than around $100,000 per year, they don't care. If you make more than that, up to you.

[sanukjim]

US citizens pay tax regardless of country you may go live in, but there are exemptions for foreign earned income in case you are working and paying taxes in another country. Move to the Moon and you will still be subject to U.S. federal income tax. Yes, if you are an American citizen who lives in Thailand like many retirees do (such as myself) you still pay U.S. taxes just as if you were living in the U.S. But you do not pay double taxes just because you are living and working in another country....you won't pay tax twice (i.e., to each country) on the same money earned. Now of course it does get more complicated than that but generally that's how it works.

Here's a partial quote from the U.S. Internal Revenue Service

https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion

If you are a U.S. citizen or a resident alien of the United States and you live abroad, you are taxed on your worldwide income. However, you may qualify to exclude from income up to an amount of your foreign earnings that is adjusted annually for inflation ($92,900 for 2011, $95,100 for 2012, $97,600 for 2013, $99,200 for 2014 and $100,800 for 2015). In addition, you can exclude or deduct certain foreign housing amounts.

Now in terms of benefits paid like old age pension/social security pension that is paid to you worldwide without reduction unlike other countries which will not pay old age pension once you move out of your home country. Or maybe deny you government managed medical care such as Medicare Part B as long as you have been paying the Part B premiums (Medical Insurance)...step foot back in the U.S. today and go get immediate medical care under Part B as long as you have been paying your premium while living overseas. And ditto for the Medicare Part A (Hospital Coverage) which is free. Once again, apparently in some other countries you have to reestablish residence before you can get fully get coverage under your government's medical care program. And if you are retired U.S. military and pay your Part B premium you can continue to use Tricare for Life anywhere in the world for your medical care....if you don't pay the Part B premium you lose the Tricare Coverge for Life at age 65.

Yeap, Uncle Sam pretty much don't care where you live in the world...you still pay taxes to him minus any foreign income exemption you may qualify for and generally he will continue to pay and provide most benefits, such as old age pension, regardless of where you life in the world.

Pib, suppose I am a US citizen living and working in Thailand, I make 200,000 $/year here of which is already taxed by thai government. What amount will I be declaring to the US IRS and what tax will I owe them? Even though my income has already been taxed by Thai govt.

The US takes in to consideration the taxes that you paid to another country .The form you fill out is for non residence tax form to inform them of any taxes already paid..Not filing will result in a fine with interest. Not claiming $1,000 in a lottery win one year ended up costing me $ 1,200 in fines and interest.

Edited June 18, 2016 by sanukjim

[robertthebruce]

Or you could do what I do..

TELL THEM NOTHING.......

[IMA_FARANG]

Not necessarily.

But as a U.S. citizen you must file an income tax return each year and declare ALL your income wherever it is earned,

However, there are possible exclusions you may qualify for......which means if you qualify you may not be required to pay tax on all your income.....but you do have to disclose it wherever it is earned.

[Pib]

Pib, suppose I am a US citizen living and working in Thailand, I make 200,000 $/year here of which is already taxed by thai government. What amount will I be declaring to the US IRS and what tax will I owe them? Even though my income has already been taxed by Thai govt.

Wish I was in that situation...making 200K per year in Thailand (or most any country

You might end-up not paying anything with the Foreign Income Exclusion plus a possible Foreign Housing Exclusion plus Foreign Tax Paid Credit. And then there is also the U.S.-Thailand Tax Treaty where some tax benefits may be available to prevent/minimize double taxation depending on your specific situation.

Like most U.S. federal tax issues there are several additional forms a person would need to complete such as the Foreign Income Exclusion Form and Foreign Tax Credits Form to see how the numbers work out for them.

And don't forget the standard deductions or itemized deductions and maybe even age reductions everyone gets which can easily add thousands more (maybe even $6K to $20K in deductions depending on your filing status/number of dependents).

Each person's tax situation will be different. This link provides a good overview I think of the foreign income exclusion and foreign tax credit issue.

And I thought vaultweller0013's post #16 above was excellent.

[maewang99]

I'm US. I'm been filing in both countries every year for more than 10 years. If you are retired and collecting pensions, and holding passive investments that include Thai securities..... it is good news all the way around. The pensions are not taxed, but you also get a refund on your Thai tax return. Notwithstanding that the corporate rates are lower now, there is still a huge boost to any Thai dividends you get during the year if you live in Thailand and the broker or bank you bought them with is Thai, such as Maybank or Bualuang Securities. The orange mailers from the TSD are as good as cash. For some stocks I believe it is still a 30% rate, meaning a 7% yielding stock means you could get as much as an additional 3% in yield for a 10% yield just from dividend payouts. Something like that. You get a prorate refund of the corporate taxes paid ahead of the dividend payout... so 3/7 of the dividend payout. And still unbelieveably, I think, for many Thai listeds the payouts are about 25% of their real actual after tax profits.... meaning that eventually the other earnings, the retained earnings, usually must be reflected in the market price of the stock at some point, as long as the company's business keeps going along. This works out very well.

Edited June 18, 2016 by maewang99

[partington]

After the Brits kicked themselves out due to overzealous collection of taxes in the new world, the now Yanks have gone one step further in making their citizens pay tax on worldwide income... that's why lots come here and hide.

Apparently Boris Johnson is being chased by the IRS for taxes earned overseas because he was born in the States.

The US has been taxing their citizens for a long time I was required to file US taxes in Japan in 1965 and have been doing it ever sense I have lived in Asia and the middle east.Living here in retirement A US citizen is still required by law to file a tax report every year.Money made outside the US is tax free to $95,000.00.but you still have to file.

The $95,0000 exclusion is not applicable to "money" but earnings.

US citizens still have to pay tax on non-earned income (capital gains, interest, dividends) world-wide, and there is no excluded amount.

Again an important consideration for retired individuals.

[sas_cars]

US citizens pay tax regardless of country you may go live in, but there are exemptions for foreign earned income in case you are working and paying taxes in another country. Move to the Moon and you will still be subject to U.S. federal income tax. Yes, if you are an American citizen who lives in Thailand like many retirees do (such as myself) you still pay U.S. taxes just as if you were living in the U.S. But you do not pay double taxes just because you are living and working in another country....you won't pay tax twice (i.e., to each country) on the same money earned. Now of course it does get more complicated than that but generally that's how it works.

Here's a partial quote from the U.S. Internal Revenue Service

https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion

If you are a U.S. citizen or a resident alien of the United States and you live abroad, you are taxed on your worldwide income. However, you may qualify to exclude from income up to an amount of your foreign earnings that is adjusted annually for inflation ($92,900 for 2011, $95,100 for 2012, $97,600 for 2013, $99,200 for 2014 and $100,800 for 2015). In addition, you can exclude or deduct certain foreign housing amounts.

Now in terms of benefits paid like old age pension/social security pension that is paid to you worldwide without reduction unlike other countries which will not pay old age pension once you move out of your home country. Or maybe deny you government managed medical care such as Medicare Part B as long as you have been paying the Part B premiums (Medical Insurance)...step foot back in the U.S. today and go get immediate medical care under Part B as long as you have been paying your premium while living overseas. And ditto for the Medicare Part A (Hospital Coverage) which is free. Once again, apparently in some other countries you have to reestablish residence before you can get fully get coverage under your government's medical care program. And if you are retired U.S. military and pay your Part B premium you can continue to use Tricare for Life anywhere in the world for your medical care....if you don't pay the Part B premium you lose the Tricare Coverge for Life at age 65.

Yeap, Uncle Sam pretty much don't care where you live in the world...you still pay taxes to him minus any foreign income exemption you may qualify for and generally he will continue to pay and provide most benefits, such as old age pension, regardless of where you life in the world.

Pib, suppose I am a US citizen living and working in Thailand, I make 200,000 $/year here of which is already taxed by thai government. What amount will I be declaring to the US IRS and what tax will I owe them? Even though my income has already been taxed by Thai govt.

You would report $200,000 income on your taxes, but you would pay tax on the $92,000 over the foreign earned income exclusion of $100,800 ($200,000 - $108,000 = $92,000). The exclusion is not a deduction, so it is taxed at the higher brackets, 28% for $108,000 to $189,300 and 33% for $189,301 to $200,000. However, you are able to apply other deductions and credits to reduce the amount owed. First, you would take the standard deduction of $6,300, reducing the taxed amount to $87,500. Then, in particular, you can take a non-refundable credit for foreign tax paid. Given that the Thai 30% tax bracket starts at $60,000 and the 35% bracket around $100,000. You would have almost certainly paid more tax to Thailand on the $108,000 to $200,000 part of your income than was owed to the US. As such, the credit for the tax paid to Thailand would reduce your tax to $0 (its not refundable like the earned income tax credit, so you don't get any money back).

At least that is my understanding. Personally, I take a deduction for housing costs instead of the foreign tax credit because it is easier to fill in and still reduces my tax owed to $0. Although, the US tax code is complicated with things like the alternative-minimum-tax (AMT), which changes up which deductions and credits you can take, so you can only really be sure what is owed by looking at all the specific circumstances for each case.

If u pay thai tax on the full income of 200,000 $ at 35 % , its 70,000 . If We Minus it as foreign tax credit from a taxable 92,000 $, its still 22,000 $ income left to be paid the US Tax? Isnt it?