US Citizens working in HK ...but paying medicaid / ss tax for US Based bank..

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  1. #1

    Join Date
    Aug 2008
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    US Citizens working in HK ...but paying medicaid / ss tax for US Based bank..

    Hi,

    I am a US citizen, and moved to HK about 3 months ago. I joined an US based ibank as a Hk local employee. However, each paycheck that I get, i am getting taxed for US Medicaid, and US Social Security tax (about 8% total)... HR told me it is b/c i am a citizen, and US based company needs to tax me on those 2 items..

    Are all the US citizens working for a US based company in a foreign country required to pay those 2 items while working aboard?

    At next April, when I file my US tax return, will the medicaid / ss tax be part of the taxes that I have paid, and I might qualify for a tax refund after all the bonifide, housing, foreign tax credit?

    I asked an account from deloitte, they said those taxes are non-refundable, and its basically, you pay them, its gone type of deal... is it true?

    Or, is there any way i can NOT pay those taxes at each check now?

    thx.


  2. #2

    Join Date
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    Quote Originally Posted by takkie:
    Are all the US citizens working for a US based company in a foreign country required to pay those 2 items while working aboard?
    Yes

    Quote Originally Posted by takkie:
    At next April, when I file my US tax return, will the medicaid / ss tax be part of the taxes that I have paid, and I might qualify for a tax refund after all the bonifide, housing, foreign tax credit?
    No, those are not refundable; only Federal and State taxes are counted for any kind of "refund" (if overpayed).

    Quote Originally Posted by takkie:
    I asked an account from deloitte, they said those taxes are non-refundable, and its basically, you pay them, its gone type of deal... is it true?
    Enjoy your US Citizenship

    Quote Originally Posted by takkie:
    is there any way i can NOT pay those taxes at each check now?
    You can give up your citizenship, but you will still owe an "exit" tax based on your tax filing over the past 10 years..and may owe taxes up to 10 years after giving up your citizenship. Land of the free and all that...you know

    A US based company is obligated by law to take out those taxes for all US citizens. If you work for a local bank it may not be the case, but you will still owe a lump sum in April when the filing is due.

    Good Luck.

  3. #3

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    Quote Originally Posted by climber07:

    A US based company is obligated by law to take out those taxes for all US citizens. If you work for a local bank it may not be the case, but you will still owe a lump sum in April when the filing is due.
    So, are you saying, even if it is a local bank, the only advantage is i will not need to pay the ss / medicaid tax upfront, but at the next April - I am still obligated to pay those 2 items when I file my tax return anyway?

  4. #4

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    not a US citizen myself but what I hear from friends calling it a "tax return" is an oxymoron....


  5. #5

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    Quote Originally Posted by takkie:
    So, are you saying, even if it is a local bank, the only advantage is i will not need to pay the ss / medicaid tax upfront, but at the next April - I am still obligated to pay those 2 items when I file my tax return anyway?
    Yes, spread the pain out or take it in one dose.

  6. #6

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    Aug 2008
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    So,

    If the SS/Medicaid Tax is about 8%. and HK Tax return itself is about 15%. Thats about 23%..

    Assuming that after the bonifide, tax credit...etc.. I even out..

    Thats a 23% vs 30% tax comparing HK and US for a US Citizen then..