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Thread: Tax impact of a US citizen working in China
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[quote=PYGRANT,380411]Are you a citizen of the US or China? If a citizen of China, you will have to pay taxes on your earnings whether the money is paid to you in the US or China. If a citizen of the US, you are still liable for taxes: However, if you are out of the US for 330 of the 365 days of the year, you qualify for the foreign income exclusion. That means that for this tax year (2009) you can exclude aprox. $90,000 from federal taxation (the amount is really $89,000 and some dollars, and is adjusted by the IRS annually b/c of inflation). Therefore, your best bet is to be paid in the US in US dollars, and transfer the money to a bank in China for your living expenses. If your income will be substantially more than $90,000, I would suggest that you get part of it paid as a housing expense, as there is also a foreign housing expense exclusion. Most states, b/c they begin with the federal AGI, will also exclude the same amount from income taxation. It's a little more complicated than that, but not substantially so (Turbo Tax allows you to use these exclusions). You can probably do your taxes yourself, but if that's intimidating, consult a tax attorney who does this stuff for a living. If you are in the US for more than 330 days, all of your income is subject to taxation. Send me a message if you need any more info.[/quote]
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