I’m curious as to how most US expats in Taiwan on packages have their benefits such as housing and schooling classified, and if is it better to file using FEIE or FTC. I was originally under the assumption that the only option was FEIE because that’s what I remember filing
In this particular case, benefits such as schooling and housing are just included in the salary which I thought this would increase taxable income using FEIE, but then read about FTC. Is this the route most expats go? The income tax here is higher than the US (after the 183 day residency test). How much of the tax liability would be credited back if say for example your rate was in the US 24%, or even 32% vs. 40% in Taiwan?
If anyone has any recommendations for a good tax accountant that would also be much appreciated. Thanks!
This will really depend on your income and the amount of taxes paid here. There are some tricky rules interpretations when it comes to using FTC too. I use FTC, have a huge tax bill in Taiwan which wipes out my US obligation. I’ve used these guys the past few years and have no complaints:
I’m not sure they are the cheapest, but I think they fairly competitive cost wise. They utilize online tools and communication to good effect as well.
The decision to take or not take the FEIE in favor of the FTC is a complex one, and the repercussions of that decision should not be taken lightly.
If you have claimed the FEIE in the past (which makes sense in many jurisdictions, e.g., Hong Kong or Singapore) then you will be sending up a red flag by not claiming it this year. Also, you may not be entitled to claim it again in the future without some kind of hearing. It’s not like MFS and MFJ where you are free to choose every year based on what’s best for you and your spouse. For whatever reason, they are pricks about the FEIE. If you always expect to earn this same level of income and don’t expect to ever move to a low-tax jurisdiction like HK or Singers, then it might be okay to forego the FEIE and take the FTC forever. But maybe not – US tax regulation is more complex and stupid than the dumbest fucking thing you ever came across.
In other words, it all depends. Talk to somebody who understands expat income taxes. This guy used to do mine, and he was good: http://www.kcostellocpa.com/