I am considering taking a long-term position in Hong Kong. I am a U.S. citizen. I'm trying to figure out how the U.S. taxes its overseas citizens.
I found this FAQ on the IRS website. http://www.irs.gov/faqs/faq13-7.html. But it's still not clear to me.
Say one makes $400,000 HKD a year, or about $50,000 USD.
- Hong Kong taxes about 15%, or $60,000 HKD $7,700 USD.
- U.S. taxes about 28%. Is the first $7,700 in takes paid to Hong Kong deductible.
Are you in effect still paying 28% in taxes regardless of if you live in Hong Kong or the U.S. (it gets paid to Hong Kong, and what's left over to US)?
Sorry, I'm obviously not in accounting...