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USA TAX estimation

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expat6023
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USA TAX estimation

Postby expat6023 » Fri, 03 Apr 2015 1:09 pm

Hi
This is the 1st full year to report USA TAX.
I stayed Singapore during whole 2014.
So I'd like to estimate the USA TAX amount through your experience.
Here is information.
-income : ~$200,000 (include everything)
-spouse and one daughter
-no deduction in USA
-no my own house in USA
-rental house in Singapore : ~$30,000
-Singapore TAX : ~$25,000
Please give me your rough estimation.

And I'm looking for agency to report my TAX.
Because when I tried to report by myself through turbo TAX, it showed I have to pay ~$13,000 which looks like too much for me.

If would be really appreciated.
Thanks for your help in advance.
Thanks

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maneo
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Re: USA TAX estimation

Postby maneo » Sun, 05 Apr 2015 8:16 pm

There are 2 key forms that may be applicable to your situation - Forms 2555 (Foreign Earned Income Exclusion, FEIE as SMS refers to it) and 1116 (Foreign Tax Credit).
If you can include these it would significantly reduce your tax liability.
Did you enter data for these forms when you used TurboTax?

Some of these tax software programs can handle international taxpayer situations (last year I used TaxAct), but these really are for those that are fully aware of what they need.

Even if you do go with a tax preparer I would suggest you prepare yourself by going through the IRS info online, so that you know what needs to be done and what info you will need to provide.

A key IRS document is Publication 54, "Tax Guide for U.S. Citizens and Resident Aliens Abroad":

http://www.irs.gov/publications/p54/index.html

There is also a pdf version: http://www.irs.gov/pub/irs-pdf/p54.pdf

There is a tax preparer that has advertised on this site before that seemed OK - Artio Partners.
Even though I probably won't use them this year, I would recommend them for your situation.

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sundaymorningstaple
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Re: USA TAX estimation

Postby sundaymorningstaple » Sun, 05 Apr 2015 8:25 pm

Also do a google for FinCEN as well as form 8938 you will find the tic boxes at the bottom of schedule B (Interest & Dividends) and depending on how you tick them will depend on whether you get to be screwed by them.

You may also want to have a good read of this thread as to some of the pitfalls that cannot be avoided at this juncture.

viewtopic.php?f=15&t=106274

Oh, roughest estimation of tax liability is 17,662. not 13K unless you are quoting your salary in SGD and not USD. Then it might be 13K. Don't have time to recompute at the moment based on 151K USD. May get to it a little bit later. Are all the figures you give in SGD or USD?

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Re: USA TAX estimation

Postby sundaymorningstaple » Sun, 05 Apr 2015 10:58 pm

Okay, back again. Converting all the numbers you gave us to USD first gives a tax liability roughly estimated at around $6144. It also gets you out of what was a 28% tax bracket.

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Re: USA TAX estimation

Postby maneo » Mon, 06 Apr 2015 3:55 pm

Assuming all figures in SGD, tax liability would be about US$6.5K, before any Foreign Tax Credit.

By the way, the S$25K figure for SG tax seems excessive.
Would expect only S$19K, taking into account the effect of the SG50 50% tax rebate (S$1K).
Did you include Earned Income relief (S$1K)?
How about the Child relief (QCR - S$2K)?
If you had CPF deducted the tax could be even lower.

As SMS noted, the S$200K equates to US$151K.
Tax on this normally would be US$25.5K.
However,if you qualify for FEIE (Form 2555) you get to exclude the 1st US$20K of this tax on the US$113K FEIE, giving the US$5.5K liability.

If you can take the Foreign Tax Credit (Form 1116), this should reduce the tax further by US$3.6K, giving a possible tax liability of just US$1.9K.

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Re: USA TAX estimation

Postby sundaymorningstaple » Mon, 06 Apr 2015 5:52 pm

maneo wrote:If you had CPF deducted the tax could be even lower.



As he said it was his 1st full tax year here, I assumed he was on an EP and not PR. That's why I didn't try to factor that one into it.

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Re: USA TAX estimation

Postby expat6023 » Mon, 06 Apr 2015 10:08 pm

Hi All
I really appreciated for your reply.
The number is all US$ to convert from Singapore $.
And I'm EP not PR.
Does that mean I can't deduct for CPF? What does the CPF mean?
I tried several time to key in through the turbo tax with given number, there is no difference at all.
Should I contact agent rather than using turbo tax?
Regarding to Singapore TAX, the number is came from my summary which came from my company.
I thought this is the final one because I don't have any experience before.
If you gave any suggestion, it would be really appreciated.
Thanks

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maneo
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Re: USA TAX estimation

Postby maneo » Tue, 07 Apr 2015 2:52 pm

expat6023 wrote:The number is all US$ to convert from Singapore $.

Already in USD, eh?
In that case, your SG tax is more reasonable, though still a little high.
For a S$264K salary, spouse & kid your tax should be just US$23K (=S$30K), taking into account Earned Income relief (S$1K), Spouse relief (S$2K) and QCR (S$4K), along with the SG50 S$1K rebate.

expat6023 wrote:Regarding to Singapore TAX, the number is came from my summary which came from my company.
I thought this is the final one because I don't have any experience before.

You might want to check with your company on what assumptions they made.
They can only provide an estimate.
You should get a formal assessment from IRAS in the next 2 or 3 months.

By the way, you can download a tax calculation spreadsheet directly from IRAS to estimate this for yourself:

http://www.iras.gov.sg/irashome/taxcalculators.aspx

As for the US tax, without FEIE your taxable income would be US$182K, with a tax liability of US$38.2K.
If you are eligible to file Form 2555, this should allow you get to exclude the 1st US$20.1K of this tax on the US$113K FEIE, giving a total tax of US$18.1K.

With FEIE excluding 57% of your income, 43% of your SG tax (US$9.8K) can be used for the Foreign Tax Credit (FTC - Form 1116). This should reduce your overall tax owed to just US$8.3K.

expat6023 wrote:And I'm EP not PR.
Does that mean I can't deduct for CPF? What does the CPF mean?

Since you are just an EP holder you are not eligible for CPF.
It hasn't been an option for EP holders for over 18 years now.
CPF stands for Central Provident Fund, which is a government board managed retirement fund, much like a 401k. Unfortunately, it does not qualify for US tax deferral.

expat6023 wrote:I tried several time to key in through the turbo tax with given number, there is no difference at all.
Should I contact agent rather than using turbo tax?
...
If you gave any suggestion, it would be really appreciated.
Thanks

I have no idea how TurboTax came up with $13K.
It's curious that this figure just happens to be midway between the tax before and after FTC amounts.
Suggest you contact whatever Help TurboTax provides for an explanation.

By the way, I used TaxAct last year and found it handled the complexity OK.
I believe it's also quite affordable.

Another poster used Artio Partners for his 1st year's tax filing.
I would concur with him.
They are quite responsive on questions and have many good (valid) references that you can check online. There are also several other tax preparers you can find by using the search function above.


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