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Reporting taxes to US - bloody hell!

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  1. #11

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    The nearest IRS is in Beijing at da embassy. Just email them, they are quite helpful


  2. #12

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    Oct 2004
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    Midlevels / USA (MD) / London
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    Quote Originally Posted by Elegiaque
    penguinsix -- this post was very, very helpful - thank you! Just a few questions...

    1. FBAR - Is this amount that requires you to report it >$10k, regardless if you're married or single? For most of my time abroad I've been single, but now I'm married. I've generally always had less than $10k. I read on this website that you can't report this late, but I think I will need to report it for the last year or two (not exactly sure off the top of my head -- there was only a brief period where I would have had more than 10k). I guess, too, that for the time when I had 10k, I will need to report ALL bank accounts, too, including one old account in another country from years ago?

    2. Is it generally ok to file the 1040-EZ version?

    3. My MPF contributions are a bit of a headache, as at different institutions I didn't always make enough to have 5% deducted. So I can't just take my overall annual income and take off 5% for the MPF (and I can't just "add" 5% to calculate what my overall income was...). Should I report my total income on the 1040 or can I just report the number I reported to the HK Taxes?

    4. Are YOU an accountant? You seem very knowledgeable. I did try contacting some of the tax accountants listed on the US Consulate website, but I found they were generally a bit of a pain to explain what I'd have to do and roughly how much it would cost. I did eventually get in touch with one that was straight forward, but it's still like $350usd/hour for their service -- ouch! If anyone knows someone who just does a bit of freelance work for taxes, and does so more inexpensively, please let me know! I guess I'm ok with paying $350 total, but I worry that they might need to do hours of work and it'd quickly add up.
    Hi,

    I am a US attorney but do not practice law. Please do not consider any advice / hints / suggestions I give on message boards as legal advice. Pursue your own independent legal counsel for all matters rather than a message board (standard disclaimer).

    1) FBAR. I do not believe it makes a difference married / single. There is no higher limit / lower limit depending on marital status.

    One thing to remember is that it is "combined" amounts, so if you have $9,999 in an account in Hong Kong and no other foreign accounts in any other countries, you do not have to report. But if you have $9,999 in Hong Kong, .05 in an Irish savings account from your gran, $2.23 in the UK in an account you forgot to close, and an online betting account in the Isle of Mann, then your combined amount is >$10,000 and you have to report the existence of ALL foreign accounts (HK, Ireland, UK and Isle of Mann). It's basically any financial account and once you get over that $10k threshold you have to spill the beans on everything.

    Generally you are not supposed to file late, and there are things like an FBAR amnesty and even 'quiet disclosure' but you're really going to need some professional advice on how to proceed on those matters. As long as you don't have any tax liability for that money you're probably not going to have much of a problem.

    2) 1040-EZ. I don't think you can use 1040EZ if you are claiming the Foreign Income Exclusion and Housing Deduction, the two most important things when filing overseas (not sure). Probably easier to go with the full form.

    3) MPF. Really not sure but will say "income is income" when it comes to the US. They don't want it glossed over with deductions for things in other countries, but the full raw amount as a starting point. MPF is a pain for Americans as you will see in this thread: http://hongkong.geoexpat.com/forum/4...ad66321-2.html

    4) I don't have an accountant to recommend. My first year here we took the HR Block Tax programs ($50 or so) and then did everything ourselves. When it was complete, I send the finalized form over to an accountant (back in America) for a cursory review that was far cheaper than having them do it all themselves. I should note I used a service back in Washington DC that catered to American expats and World Bank staff as your "average Joe" accountant in America hasn't much experience with foreign income exclusions and FBAR.

    There is a US expats living in the UK message board and they have a special section just on taxes. You'll find some good advice there on many of your questions.

    US - UK Taxes

  3. #13

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    Mar 2007
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    13,131

    You could always try to pull a Boris and tell them to go fcuk themselves :

    Mayor Boris Johnson's Terrible, Horrible, No Good, Very Bad Day...As An American - Forbes

    ..Mr. Johnson says he wont pay, and he doesnt sound like hes kidding....

  4. #14

    Join Date
    Oct 2012
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    Quote Originally Posted by penguinsix
    Hi,

    I am a US attorney but do not practice law. Please do not consider any advice / hints / suggestions I give on message boards as legal advice. Pursue your own independent legal counsel for all matters rather than a message board (standard disclaimer).

    1) FBAR. I do not believe it makes a difference married / single. There is no higher limit / lower limit depending on marital status.

    One thing to remember is that it is "combined" amounts, so if you have $9,999 in an account in Hong Kong and no other foreign accounts in any other countries, you do not have to report. But if you have $9,999 in Hong Kong, .05 in an Irish savings account from your gran, $2.23 in the UK in an account you forgot to close, and an online betting account in the Isle of Mann, then your combined amount is >$10,000 and you have to report the existence of ALL foreign accounts (HK, Ireland, UK and Isle of Mann). It's basically any financial account and once you get over that $10k threshold you have to spill the beans on everything.

    Generally you are not supposed to file late, and there are things like an FBAR amnesty and even 'quiet disclosure' but you're really going to need some professional advice on how to proceed on those matters. As long as you don't have any tax liability for that money you're probably not going to have much of a problem.

    2) 1040-EZ. I don't think you can use 1040EZ if you are claiming the Foreign Income Exclusion and Housing Deduction, the two most important things when filing overseas (not sure). Probably easier to go with the full form.

    3) MPF. Really not sure but will say "income is income" when it comes to the US. They don't want it glossed over with deductions for things in other countries, but the full raw amount as a starting point. MPF is a pain for Americans as you will see in this thread: http://hongkong.geoexpat.com/forum/4...ad66321-2.html

    4) I don't have an accountant to recommend. My first year here we took the HR Block Tax programs ($50 or so) and then did everything ourselves. When it was complete, I send the finalized form over to an accountant (back in America) for a cursory review that was far cheaper than having them do it all themselves. I should note I used a service back in Washington DC that catered to American expats and World Bank staff as your "average Joe" accountant in America hasn't much experience with foreign income exclusions and FBAR.

    There is a US expats living in the UK message board and they have a special section just on taxes. You'll find some good advice there on many of your questions.

    US - UK Taxes
    I understand -- It's still very helpful to get some informal information about all of this. I'm pretty ignorant when it comes to what's what (I had to just look up what an IRA is). Thank you for your help!

    1. FBAR: I've kept separate accounts generally from my non-US partner. But there is one leftover UK account that has my name on it (not sure who's the principle holder of the account or what the deal was with it, but I think my name was on it, too). Only had small amounts in it. I saw on the FBAR form that I have to list other people on any accounts. So I guess this means I have to disclose all the information about my partner. But that wouldn't subject him suddenly to the whole US tax debacle, would it? (And his other accounts...)
    There is this sort of program now to make life a bit easier for people who come forward: Foreign Earned Income Exclusion. But again, it's difficult to understand (and if it would apply for me)!

    2. Will go for the full 1040 form, then, although it's really going to take a few days to read through all the instructions. Can anyone chime in and say which version of the 1040 they do? I don't think I would qualify for a housing exclusion (I am not under a housing contract and don't own any property.)

    3. I guess I will include what what towards the MPF as my income as well. Do I also have to report the 5% my employer is contributing to it as "my income"? From what I understand about that thread, there are mostly problems for Americans in HK who want to invest back home in an IRA. I'm happy to just continue with the HK MPF. Honestly, my income and thus MPF contributes are pretty puny -- shouldn't make a big difference.

    4. That's a good suggestion to have H&R Block simply review what I prepare... Thanks for the other link.

    Thank you for your help!!!
    Last edited by Elegiaque; 20-11-2014 at 03:33 PM.

  5. #15

    Join Date
    Oct 2012
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    4,247
    Quote Originally Posted by HowardCoombs
    You could always try to pull a Boris and tell them to go fcuk themselves :

    Mayor Boris Johnson's Terrible, Horrible, No Good, Very Bad Day...As An American - Forbes
    You can be assured that I will write a lovely "F- you" note to include in my mailed-in forms. I doubt it will ever get across to anyone, but at least I'll hopefully make someone locked in a bloody miserable office job smile a bit.

    I didn't realize he was US-born.... I'm sure his taxes would be quite a mess to report.

  6. #16

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    Jul 2011
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    696
    'where I was unfortunately born'. What a pity too. If you had been born in mainland china probably, so much better off today. Imagine all the benefits the chinese enjoy, let me count the ways.

  7. #17

    Join Date
    Mar 2007
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    13,131
    Quote Originally Posted by jobin
    'where I was unfortunately born'. What a pity too. If you had been born in mainland china probably, so much better off today. Imagine all the benefits the chinese enjoy, let me count the ways.
    1) Dont have to pay tax on income generated while not residing in China
    2) Dont have to report to the Chinese government on an annual basis.
    3) Non Chinese banks and brokerage houses dont hate me nor my passport
    4)

  8. #18

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    Oct 2012
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    The US taxes have to be reported by calendar year, unlike the April-to-April system in HK?!

    So I can't use the numbers on my HK tax forms and need to do all new calculations by digging through old bank statements and adding up each bit I made? (I don't have regular pay slips...)


  9. #19

    Join Date
    Dec 2014
    Posts
    2

    Unfortunately, yes US taxes need to be reported every calendar year.

    I'm having quite a lot of trouble with figuring out how MPF is taxed. I keep hearing that we need to treat it as a PFIC and as a result file in form 8621, but as I use online software to prepare my taxes (Turbotax), they don't include PFIC reporting because it is so unusual. This leaves us in a bit of a weird state because I really can't afford to pay thousands of USD for an accountant to report the minuscule amount that is in my MPF accounts. Hong Kong's mandatory MPF requirement and America's PFIC rules combine to make paying American taxes in Hong Kong a true nightmare. Is there any kind-hearted accountant out there who can explain this fully so us Americans who aren't extremely wealthy can file ourselves using Turbotax, or something similar? I and I'm sure many other would be extremely thankful!

    Thanks!

    Last edited by ChristmasCat; 31-12-2014 at 09:52 PM.

  10. #20

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    Sep 2014
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    I'm thankfully for being born Canadian, no worldwide tax and no insanely complicated tax filing in HK. Simple and pain-free.


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