US Tax Filing & Compliance

[Lisafuller]

Worst part with 1116, you need to computate 10 full years of unused carryovers and excess limits. It’s almost like filling out a 1116 for each of the 10 years retroactively, but worse because you have to figure it all out on your own with a bunch of mind bending calculations and cryptic terminology. I spend hours online trying to find a good/simple explanation, there is nothing out there that is complete or simple.

The jargon is what gets me, not sure why more hasn’t been done to cut through the fluff. Don’t know how you do it.

[Lisafuller]

I'm still thinking about renunciation as well after all these years. I only have three living blood relatives in the US. Got five here and all are mine. What's to go back for? Seriously thinking about it now. I just need a trigger to pull as I did some reading about it recently and I don't think I would have any tax issues as I've never seen the kind of money they are talking about, taxation wise.

Don’t you still feel a connection to the states though? What would the benefit of renouncing at this juncture be for you? I’d say if its not broke don’t fix it, having PR here and citizenship there is a pretty good place to be.

And that, my friend, is what keep stalling me. Adding to the fact that I once signed my life away to the country if it needed me to give my life for it. It doesn't seem like much to someone who may never have done a war, but the impact in my head is for ever and that is where I keep tripping over what seems to be a major mental stumbling block. If I can get this year's return across the hurdle of switching from MFS to MFJ, I might see things in a different light. But it really chaps my butt that I have to pay taxes on my SS.

I’ve never signed on to serve, but I do get your point. My grand uncle served in Vietnam, still wears his dog tag around his neck to this day. Signing your life off to protect your country is huge, whether or not you follow through with it.

[Lisafuller]

I finished up my return late yesterday evening, Only need to make a hard copy as a back up to the copy on my PC. Main copy is ready for signatures and mailing. I think I'm going to invest in a bus fare out the DHL spot near the airport to do a private delivery. They can also give me written notification on mailing and delivery dates and it gets the return where it needs to go in a couple of days or faster if I want to pay for it! All my current headaches were because the IRS closed up shop after covid hit in 2020 for 6 months. I had know way of knowing if my return & cheque for payment of taxes at arrived and at the end of May I got worried so I made an electronic payment (e.g., a double payment) Then in early August I saw my cheque that was attached to the return had been presented to the bank for payment. Then I got a bill for additional taxes and the crap just rolled forward and ultimately impacted the 2020 return which is still not finalized how much refund I was supposed to get. I know as of Oct 2020 I was supposed to get over $300 refunded or carried forward. So had to attach explanation so the next dunderhead at IRS will possibly have some idea where to start looking.

I’d do the private delivery too. More expensive, but the certainty and peace of mind is worth more.

[Lisafuller]

I do the same thing, but it never got to the other end or at least opened. That's the problem. It appeared it didn't get opened until August some time based of the presentation of the cheque. But I have to ensure it's on time and early enough for the ITIN to be issued (they will insert in on my tax return at the ITIN centre in Austin, TX if all is okay.

This happens just about as often as you might imagine. You’d think they would have modernized the process by now, would make things a hell of a lot easier.

[malcontent]

The tax code just keeps getting more complex as new laws are passed — nobody stops to think about whether it makes sense as a whole.. lawmakers just expect the IRS to find a way to make it work.

But this is good for taxpayers in one way — the IRS is so busy trying to keep up with this monstrosity of a tax code, they don’t have time to audit many… thank goodness for that. I’ll bet they could find something wrong with 99.9% of overseas tax filers if they had the time to check.

[Lisafuller]

The tax code just keeps getting more complex as new laws are passed — nobody stops to think about whether it makes sense as a whole.. lawmakers just expect the IRS to find a way to make it work.

But this is good for taxpayers in one way — the IRS is so busy trying to keep up with this monstrosity of a tax code, they don’t have time to audit many… thank goodness for that. I’ll bet they could find something wrong with 99.9% of overseas tax filers if they had the time to check.

True, although if they made things less complex perhaps people would have an easier time keeping to requirements and audits wouldn’t be a problem. It’s a problem they’ve created for themselves.

[HogHollow]

Wow, seems like you're all pretty adept at filing your taxes while living in Singapore!
Since it's my first year here, I've taken up the services of a tax accountant who specializes in US taxes, but gosh, it's pretty pricey.
So I'm now encouraged to do my 2022 taxes myself next year. Do you all use Turbotax to do your taxes, or do you file it in hard copy by mailing it back to the US?

[Myasis Dragon]

Wow, seems like you're all pretty adept at filing your taxes while living in Singapore!
Since it's my first year here, I've taken up the services of a tax accountant who specializes in US taxes, but gosh, it's pretty pricey.
So I'm now encouraged to do my 2022 taxes myself next year. Do you all use Turbotax to do your taxes, or do you file it in hard copy by mailing it back to the US?

I would NOT employ a Singapore based accountant to do US taxes. Too expensive. Any US based CPA with international tax experience can do you a good job, and for less money. I'll recommend mine if you want her name.

[HogHollow]

Oh yes, it'll be much appreciated if you could please PM me a recommendation for a US based tax accountant.
On a separate note, I almost forgot it was mardi gras today! Guess they don't do beads and king cake here?

[malcontent]

Do you all use Turbotax to do your taxes, or do you file it in hard copy by mailing it back to the US?

I know a lady in my office who eFiles using H&R Block and it costs her US$69. She makes over US$250k and usually ends up paying a 4-figure tax bill.

If your income does not exceed the income and housing exclusions on 2555 and you don’t have any income other than wages in Singapore, it can be as easy as 1040 and 2555. Schedule B part III is technically necessary if you have a local bank account (though I have omitted it many times in the past… just didn’t know!).

Personally, I like to paper file. It’s like driving a stick shift instead of an automatic… it’s more work, but you get more out of it once you get the hang of it.

[HogHollow]

Do you all use Turbotax to do your taxes, or do you file it in hard copy by mailing it back to the US?

I know a lady in my office who eFiles using H&R Block and it costs her US$69. She makes over US$250k and usually ends up paying a 4-figure tax bill.

That's actually quite a low tax bill for what she makes, since I'm assuming that there's no IRS withholding in Singapore for her throughout the tax year? I would imagine $250K USD a year in compensation would result more in at least a $50K USD tax bill.

[malcontent]

Roughly looks like this…

$250k
-$175k FEIE+FHE
-$25k MFJ
————
$50k @35% rate

$17.5k tax
-$8k foreign tax credit (15% on $50k)
-$4k child tax credit (2 kids)
———
$5.5k payable

[HogHollow]

Roughly looks like this…

$250k
-$175k FEIE+FHE
-$25k MFJ
————
$50k @35% rate

$17.5k tax
-$8k foreign tax credit (15% on $50k)
-$4k child tax credit (2 kids)
———
$5.5k payable

I'm a regular W-2 tax payer who takes standard deductions every year(no kids), so I have to look up those acronyms you've listed.
However, the estimate of having to pay only $5.5K on a $250K salary is pretty crazy. I'd have to pay about 10 times that making $250K when I was living in the US.

[malcontent]

Roughly looks like this…

$250k
-$175k FEIE+FHE
-$25k MFJ
————
$50k @35% rate

$17.5k tax
-$8k foreign tax credit (15% on $50k)
-$4k child tax credit (2 kids)
———
$5.5k payable

I'm a regular W-2 tax payer who takes standard deductions every year(no kids), so I have to look up those acronyms you've listed.
However, the estimate of having to pay only $5.5K on a $250K salary is pretty crazy. I'd have to pay about 10 times that making $250K when I was living in the US.

You still have to pay Singapore income tax on top of that. The effective rate at that income level is around 15-16%. Yes, that is around half what you’d pay in the US, but the savings are more than eaten up by the cost of living. You have to consider the large indirect taxes you pay here, like when you buy a car. The US tax code does not cater for that - - there is no way to credit “car taxes” you paid here against your US tax bill. Big picture, you’d almost certainly be better off money-wise in the US, if it were not so, there’d be no need for expat packages.

[HogHollow]

You still have to pay Singapore income tax on top of that. The effective rate at that income level is around 15-16%. Yes, that is around half what you’d pay in the US, but the savings are more than eaten up by the cost of living. You have to consider the large indirect taxes you pay here, like when you buy a car. The US tax code does not cater for that - - there is no way to credit “car taxes” you paid here against your US tax bill. Big picture, you’d almost certainly be better off money-wise in the US, if it were not so, there’d be no need for expat packages.

Oh yes, point taken about having to pay the additional Singapore income tax.

No argument here about the cost of living difference in Singapore. Seeing Driscoll strawberries for $15 a box, $20 pints of Hagen Daaz, and the ridiculous prices for their detached houses in the news, it's definitely much pricier to live in Singapore even compared to metropolitan areas in the US like NYC or SF.