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Taxes.. US citizen relocating to Singapore

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traveler2929
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Taxes.. US citizen relocating to Singapore

Postby traveler2929 » Mon, 14 May 2012 10:27 pm

Hello I'm considering a permanent move to Singapore from the US and was wondering if someone can provide guidance on the tax policy. As I understand it, US citizens are currently able to avoid paying double taxes (US + Singapore) and would like to know if someone on this forum has dealt with this?
As a note, I don't want to give up my US citizenship to get the tax break as I may return in the future.
Your advice is much appreciated...

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maneo
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Postby maneo » Tue, 15 May 2012 12:56 am

IRS provides all sorts of info online:

http://www.irs.gov/businesses/small/int ... 24,00.html

When you have been abroad long enough, you may qualify for the Foreign Earned Income. There are 2 tests for eligibility:
1) Bona Fide Residence Test
2) Physical Presence Test

You may also be eligible for a Foreign Tax credit (Form 1116).

Together these can reduce the tax burden.

Download & read Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad.

http://www.irs.gov/publications/p54/index.html
http://www.irs.gov/businesses/article/0 ... 63,00.html

technoviking
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Postby technoviking » Tue, 15 May 2012 1:50 am

is your name eduardo, by any chance?

:D

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zzm9980
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Re: Taxes.. US citizen relocating to Singapore

Postby zzm9980 » Tue, 15 May 2012 4:47 pm

traveler2929 wrote:As I understand it, US citizens are currently able to avoid paying double taxes (US + Singapore) and would like to know if someone on this forum has dealt with this?


The first US $94k-ish per year of earned income is exempt. Anything over that, you pay at full rate above that amount. Any unearned income (essentially any money you make that is not directly from your paycheck- interest, rental income, capital gains, etc) is not exempt.

This roughly translates to a maximum savings of US $16k per year on tax from payroll.

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zzm9980
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Postby zzm9980 » Tue, 15 May 2012 4:50 pm

maneo wrote:When you have been abroad long enough, you may qualify for the Foreign Earned Income. There are 2 tests for eligibility:
1) Bona Fide Residence Test
2) Physical Presence Test


And if you can't meet the conditions of test number 2, you can file for extensions until you do. It's a nice loop-hole :) Note that all conditions associated with filing for extensions still apply. Such as if you ultimately will owe, it's still due by April 15th.

Also, being outside the US, you're expected to make quarterly tax payments if you expect to owe.

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maneo
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Re: Taxes.. US citizen relocating to Singapore

Postby maneo » Sat, 02 Jun 2012 2:07 pm

zzm9980 wrote:
traveler2929 wrote:As I understand it, US citizens are currently able to avoid paying double taxes (US + Singapore) and would like to know if someone on this forum has dealt with this?


The first US $94k-ish per year of earned income is exempt. Anything over that, you pay at full rate above that amount. Any unearned income (essentially any money you make that is not directly from your paycheck- interest, rental income, capital gains, etc) is not exempt.

This roughly translates to a maximum savings of US $16k per year on tax from payroll.

Strictly speaking, it's the tax on the excluded amount (first $94K) of overseas earned income that is exempt.
The tax on the amount above that is the difference of the tax on the total taxable income plus the excluded amount minus the tax on that excluded amount (i.e. the $94K).
That's what's meant by taxed "at full rate above that amount."

Time spent working in the US (e.g. business trips, etc.) is supposed to be accounted for and may reduce the total amount of eligible income.

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sundaymorningstaple
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Postby sundaymorningstaple » Sat, 02 Jun 2012 2:45 pm

Different words, same message. Between the two I guess the OP will understand.

scarbowl
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Postby scarbowl » Tue, 05 Jun 2012 9:48 am

Further complicating your US tax situation includes that the credit for Singapore income taxes you can take against your US income taxes is reduced by the tax you pay in Singapore on items that are not taxable in the States. For example, in Singapore you pay tax on health insurance paid by your employer. But this benefit is not taxable in the States. Consequently, you cannot take that part of Singapore taxes on this benefit as a credit against your US taxes.

malcontent
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Postby malcontent » Fri, 22 Jun 2012 4:09 pm

US tax law on Americans working overseas is highly complex and not for the faint of heart. That said, for the average Joe, you should be able to exclude most, if not all foreign income from taxation.

The amount you can exclude depends on several factors, but the Earned Income Exclusion which is $95,100 in 2012 is the main one and can even be pro-rated based on how many days you were physically overseas provided you will be overeas at least 330 days over a 12 month period (which can extend into the following tax year).

On top of that, a portion of your rent and utilities can also be excluded from income through the Foreign Housing Deduction. However, you can only deduct housing expenses that exceed $14,864 (2011) up to a maximum of $67,000 for Singapore.

You will also still get your standard deduction and exemptions you are eligible for.

After all that is taken into consideration if you still have income left over, you can then apply any credits you could be eligible for. You could get some foreign tax credits on the Singapore taxes you paid on income that exceeded the earned income and housing exclusions above.

There are other considerations if you are married and have children. For example, a full-time live in maid could reduce your tax bill by at least $600 per child. You may even be able to take twice the Earned Income Exclusion if you file jointly with your spouse. Bottom line, the amount you can earn without attracting US taxes will vary from a little over $100,000 up to nearly $300,000 annually depending on your specific circumstances.

argentusa
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Re: Taxes.. US citizen relocating to Singapore

Postby argentusa » Tue, 26 Jun 2018 8:20 am

The amount that can be excluded in 2018 is a maximum of $104,100. All of the advice above was good.

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argentusa
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Re: Taxes.. US citizen relocating to Singapore

Postby argentusa » Tue, 26 Jun 2018 8:24 am

The loophole of extending is accomplished by filing the form 2350 and if you extend until you meet the bona fide residence test, it is much easier and you don't need to meet the 330 days out of 365 being foreign. In other words, you could qualify for the bona fide residence test and avoid the physical presence test.

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