Monday, April 02, 2007

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Recently a co-worker impressed on me the need to keep filing my US taxes. In case I ever want to consider moving back for any amount of time, this is probably a good idea.

It turns out that filing is not as painful as I thought. As long as I can prove that I'm an expatriate with a bona fide residence in China, I qualify for the Foreign Earned Income Exclusion (FEIE). This means that I don't have to pay taxes on the first USD 82,400 of income that I made here in China. So the only taxes I have to pay this year are on the interest earned on savings in my credit union account back Stateside.

But that doesn't mean I don't have to file at all. Luckily, there are only two forms for me to fill out, and as an expat I qualify for an extension till June 15th (which I hope not to use because any tax owed accrues back-interest starting from the original April 15th deadline). The two forms are the 1040, the main tax form, and the 2555-EZ, to claim the FEIE. These come with a nifty set of help files. I also have to attach a statement claiming to meet the conditions for the deadline extension, if I choose to take it.

The only thing I'm not certain about is Jodi's status. To the IRS, she is definitely a non-resident alien (NRA) without a social security number. I'm pretty sure that it would be best for me to file as "Married Filing Separately" but that's where my certainty starts to drop off. So, can I claim her as an exemption? If so I could double the amount of our income that falls under the FEIE. But does she need a Tax ID Number (TIN)? And it looks like I'm not the only one wondering...

(On a side note, I've got my Chinese tax stubs sitting in front of me, and I've calculated my tax rate sits at a hefty 43.9%. Crikies!)

2 Comments:

At Apr 2, 2007, 11:03:00 PM, Anonymous Anonymous said:

Are you a Russian guy in Shanghai?

 
At Apr 3, 2007, 3:32:00 AM, Blogger Micah said:

Do Russians have to file personal taxes? My passport is USA. I live in Shanghai. The Russian subtitle is something I knicked off the net.

 

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