In 2002, I lived/worked in Taiwan for only about 8 months. I was told that, since I didn’t live/work here for the full year, I still had to pay taxes on the money I made in Taiwan. However, my source (the e-file service I used last year) said that this past year (2003) I wouldn’t have to pay US taxes on my Taiwan income, because I was living/working here all year.
However, I’ve heard conflicting reports from different sources about this. Can someone give me a definitive/conclusive answer on this? I’ve tried to check the IRS website, but that is about as easy to figure out as the tax laws. :swear:
Do I need to file at all? I didn’t make any money in the US last year… not even through investment income (since, I don’t have any ). If I need to file, do I need to report my Taiwan income?
[quote=“QuietMountain”]Do I need to file at all? I didn’t make any money in the US last year… not even through investment income (since, I don’t have any ). If I need to file, do I need to report my Taiwan income?
.[/quote]
You need to file a report of your income, from WHATEVER source. You will probably not owe any taxes. US taxpayers’ foreign-earned income under US$ 80,000 is tax-exempt … But you do have to report it.
See if you can claim tax residency here in Taiwan for 2002, i.e. you have to prove you were at least 182 days in the country. This should result in a lower taxation here.
If so (being out for more than 182 days) you might also be tax exempted in your country of origin, though it might depend if they have a double-taxation agreement / the tax laws in the US.
Not sure if this is possible in the US, but I gave up my residence in Germany (we have a houshold registration system similar to Taiwan) and hence I do not even need to declare anything, the German “IRS” treats me as non-existent for the time being.
Tigerman is exactly right. It’s a pain in the ass to file, but if you made more than a few thousand US dollars anywhere in the world, then you have to file a return in the US. It’s required if you are a US citizen.
You won’t owe any taxes on the income you earned in Taiwan, but you might owe taxes on any investments that you had in the US if you sold anything.
Just make sure you keep a copy of your upcoming return for future reference. You’ll be doing almost the exact same thing every year. The only thing that will change will be your reported income.
The amount of time you spend here in a year has nothing to do with the requirement to file. You are legally required to file and report all your income as Tigerman says. If you qualify for the overseas exemption–and living here all year you would–you’re income will be exempt up to $70,000–what I remember–though Tigerman may be correct here as well.
[quote=“scomargo”]By the way, there is a Taxes forum under the Legal Forums. You can find a lot more information there that you might find helpful.
For instance, you can still contribute to a Roth IRA even though you are working in Taiwan.
Technically, this thread probably belongs there too, but that’s for the moderators to decide.[/quote]
First of all, and most importantly, thanks for your help on this.
Second of all, technically, I didn’t know about the taxes forum. In fact, I didn’t even think to look there.
And, third of all, I expected that I had to file, no matter what. I just wanted to make sure (hence the question). My main concern was really whether I would be taxed. Yes, it will be a pain to keep filing every year I’m here. But, as long as they aren’t going to tax me on my Taiwan income, since Taiwan is already doing that (although, at a lower rate), I can handle the filing.
There seem to be two different standards operating with regard to taxes (disclaimer: I’m not a tax lawyer, nor do I play one on TV).
For Taiwan, it’s easy: if you made your 183 days last year, you are a resident of Taiwan for tax purposes for that year.
For the US, you have the choice of using the physical presence test or the tax domicile test to determine whether you may exclude foreign income. (If you are in the US, you still have to file taxes on your non-US source income; makes no difference where it comes from as far as the IRS is concerned).
The keywords you can search for the best information are usually “foreign earned income exclusion”.
Take a look here for information on how to determine whether the IRS will believe you are not a US resident and so can exclude your foreign income up to their limit (a limit which, tragically, I am in little danger of exceeding… )
You obviously have to file in the US. Second, you are only exempt if you:
A) earn less than 70,000 or whatever and B) if you live and work in a foreign country for 330 days. I guess the IRS gives you a month leeway. Let’s say you start work in Taiwan Feb 1 2004. If you leave Taiwan Dec 1 2004 you have to pay taxes, SS, etc…This is my understanding.
And remember, you must tell the US IRS about every NT you earned while not actually in the US. Does ‘taxation without representation’ ring a bell?
Years ago the IRS was floating forms in Taiwan with the most outrageously oxymoronic logo which read, “IRS International”.
So, yes, I’m against being taxed on foreign earned income at all, period. However, that is the law, and the IRS has it’s own courts which will kick the s*** out of you if you don’t play by the rules. The good news is the 70,000 dollar exemption already discussed.
In the last year, I believe there was talk in Congress of getting rid of that exemption, but it didn’t ride well with corporate interests so we’re still safe. And as corporate America is GOD, I don’t think that exemption is going anywhere soon (cross fingers emoticon here.)
First year in Taiwan: If a person’s first year in Taiwan was less than 330 days, and so he does not qualify for the Foreign Earned Income Exclusion, does that person owe U.S. taxes on all of their Taiwanese income? Is there no credit given for paying taxes to another country while living there?
FAQ: There are many threads which hit on bits of info for filing U.S. taxes. Does one exist that sums up in one place the basics of “How to file U.S. taxes if you work in Taiwan” (or an external link other than the IRS)?
seeker4, there’s a lot of factors that go into whether or not you can use the income exclusion or not. I recommend consulting The Expat’s Guide to US Taxes as a good resource to find out more.
I have to fill out 4 years worth of tax forms to get my wife into the country. they will want to see that we have enough income. the problem is I havent files, have no idea how much money I made and have no records. I know that I can claim up to 70 or 80 thousand a year. should I under estimate or over estimate?
If I under estimate it might make immigration for the wife more difficult but it would qualify me for free medical care for our baby. If I over estimate I can smooth the immigration process and show more income to help with home buying loans.
I’m not totally lieing becasuse I made between 7000 and 40000 depending how you add it up. I could claim my wife’s income before she had a tax id, as my (family) income or I could not count it depending on where the advantage is.
any thoughts
Apparently the IRS no longer supplies this information, but relies on the Treasury Department’s Treasury Reporting Rates of Exchange averages. The link for the summary for Taiwan is here:
It would be nice if AIT actually put this information in a place we could find it. I went though practically everything and even used the search.
I just got off the phone with the IRS, and you are right, they only tell you to go to a place on their website which has links, but I didn’t find the links very helpful either.
Yeah, it was pretty frustrating to track down. Google first led me to the US Embassy Japan website which explained that it’s based on the Treasury Report and then it was easy to get google to find that info for Taiwan.
). If I need to file, do I need to report my Taiwan income?
). If I need to file, 
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