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This is my first year filing the 2555 and I want to make sure I got this down correctly:
1) 2555 is completed according to the GROSS revenue (not taxable revenue, correct?)
2) After converting the RMB into USD, based on monthly average ex rate, I put the total income on my 1040 form line 7
3) Since I lost a ton of money in stocks I take the standard $3000 deduction on line 13
4) According to form 2555 I put the (92,900) tax exemption in line 21, then get my total income.
5) Take the standard deduction on line 40, the standard exemption on line 42, then get my taxable income.
6) I pay the taxes according to the tax tables for this remaining balance
FWIW, I cannot claim any housing exclusion because my actual rent+etc. is still less than the 14,864 threshold.
Please tell me if I am missing something critical here. Thanks!
This is my first year filing the 2555 and I want to make sure I got this down correctly:
1) 2555 is completed according to the GROSS revenue (not taxable revenue, correct?)
2) After converting the RMB into USD, based on monthly average ex rate, I put the total income on my 1040 form line 7
3) Since I lost a ton of money in stocks I take the standard $3000 deduction on line 13
4) According to form 2555 I put the (92,900) tax exemption in line 21, then get my total income.
5) Take the standard deduction on line 40, the standard exemption on line 42, then get my taxable income.
6) I pay the taxes according to the tax tables for this remaining balance
FWIW, I cannot claim any housing exclusion because my actual rent+etc. is still less than the 14,864 threshold.
Please tell me if I am missing something critical here. Thanks!
You should really use Turbotax Online. It makes the process much easier and explains everything along the way. I used it last year and it worked nicely.
Be careful with Turbotax. It makes mistakes, especially for forms 2555 and 1116 (for entering foreign earned income and for calculating the foreign tax credit). I use it, and it’s a great guide for getting the forms filled out, but I’ve learned to check it carefully.
And don’t forget to fill out all the forms on your bank accounts, any business interests you have, and, starting next year, all your foreign assets.
No, the US government does not hate its expats. But it does assume we are all criminals.
You should know that the IRS doe NOT require W2’s to file your tax return, so if you work for anon US company, you can claim what ever income you would like, and also not claim any housing and other miscellaneous benefits you receive.
Also, you do not get the full foreign income exclusion of 92K, if you dont actually make 92K, there is a formula based on your actual wage as it relates to the foreign income exclusion amount.
It am sure it sucks to have to do the taxes yourself, but be careful, you could be cheating yourself out of some $$ depending on your income levels. A CPA will cost you about $600 to do your federal taxes, depending on how many supplemental forms you need to prepare. Since you tool some losses in the market, might be worth the investment of a professional. At the very least, file an extension and it will buy you another 120 days to figure it out
If u just go to the IRS web site and search for expat (citizens living overseas) taxes, you will find a whole section detailing the policies. In there, IRS actually provides you a bunch of free online filing software (approved software vendors or something). You just click through the link and enter your information in. Took me 30 minutes to do the whole thing.
Doing it yourself on paper is time consuming and ur manual calculations WILL have mistakes and you will miss some deductions. Its completely FREE and EASY..so why not use a tool IRS suggests that you use?
Dump it into wifey’s name, keep her entirely away from being anything the US can claim for taxes. Problem solved. Sure, I control all the accounts, but there is no paper trail to prove any of that.
Last year I shifted all my brokerage accounts in the US over to the wife as well. Not having any taxes on capital gains is a nice thing
Also, currently in the process of obtaining at least one other passport through heritage. If worse comes to worse, I’ll just be renouncing the US and call it a day. I’m pretty much done with the place anyways.
As it is, they are desperate for revenue, and will go after any group that that they think has money but doesn’t defend itself well. About 10 years ago they started going after the most obvious tax cheats using overseas accounts, and now the bureaucracy is in gear and keeps trying to expand its powers to chase down foreign income and assets. They actually get very little money from it, but they’ve built their careers on it so they keep at it. And the congressman don’t care, since nobody “important’ is complaining about it they just stick it into any old bill that comes by.
Of course, it screws us expats and is almost impossible to enforce properly. And their continuous effort to enforce it give immense discretionary powers to faceless bureaucrats, and pee-offs our allies and friends. It discourages US exports by seriously raising the costs for companies to send people overseas, is mind-bogglingly intrusive, and strongly encourages the world to set up banking and payment systems that avoid the US. In the long run there is no way that is worth the small amount of extra tax revenue they get, but since when did congressman care about the long run?
Well said. The US government is more and more despicable by the day. FATCA and HIRE are probably among the most arrogant pieces of legislation ever written. Trying to govern foreign banks on the foreign bank’s own soil, ridiculous. Yes, we know what they are going for, but it is just not right. Imagine if anyone tried to do that to bank on US soil?
With all of their money printing and oppressive legislation, I eagerly await the day they erode and inflate themselves into irrelevancy. They need to swallow a hard pill so America can begin the long and painful healing process of bringing itself back to both financial and social health.
In the words of Robert LeFevre, “Government is a disease masquerading as its own cure”. Nothing could be a more true description of the US government at this moment in time.
At some income and tax levels, you do actually save US taxes by not taking the housing and/or the expat income deductions. You have to run the numbers to see where you are at, though it’s a pain to do so. It’s hard enough to figure out what you owe once (and be sure you did it right), much less under different scenarios.
On the US abuse of its position at the center of the world’s financial system: China is big enough to ignore FATCA, most other countries can’t. Yet.
Stupid laws like FATCA will cause China and other countries to get together and create payment systems that avoid the US. That will make it harder for the US to finance its debt overload, and harder to twist people’s arms to comply with things like the Iran embargo. In other words, in order to collect a few dollars now, the US is setting itself up for much higher costs and lower influence in the future.
My only disagreement is on motives…he ascribes it to hatred, I think it is due to a mix of stupidity and bureaucratic inertia. The end result is the same.
Wondering where you guys go in emergencies for something serious – ie getting reliably good help fast. Hua Shan foreigner section has a good reputation. I think Parkway sucks -besides being stupidly overpriced.
Has anyone ever seen a study/ranking?
Others I know of, but don’t know much about-
Global Health in Kerry Center
SH United Family in Hong Qiao
SH East International
Pudong?
Shanghai Family United is the only place I’d go to in an emergency.
Twice this year for our family
You can get sent away from other hospitals here if they don’t think they have the facilities for you.
My wife had to have minor surgery at Shanghai Family United and they were excellent. I am very fussy about this stuff and they were really good .Of course for anything serious I would be back to Australia
Specific to emergencies only where time is of the essence, it really depends where you live. If you happen to live within a few minutes of Shanghai United, then sure, that would be a place you could go.
But if you don’t, which would include a majority of us, its best to find out where the closest University hospital is located and go there. If you are bleeding out, having a heart attack, etc, this will be your best choice. Don’t let yourself fall victim to newbie stereotypes.
A few months ago I was having serious chest pains and thought I would try Shanghai United. I live in Xujiahui and it took me 28 minutes to get there. I know because I timed it. I won’t say anymore other than it was not an experience that instilled confidence in me. They also are having insurance issues because they over bill etc, so you will start seeing many of the insurance carriers dropping them just as happened in Beijing several years ago.
I have hear personal in-patient and outpatient experience at Zhongshan, Renji and Huashan hospitals and have found Zhonshan to be very good.
Point is, save your life and part of doing that is getting medical care ASAP.
/profile/171-snippets/?do=hovercard” data-mentionid=”171″ href=”<___base_url___>/profile/171-snippets/” rel=””>>@Snippets you are right and wrong at the same time. Yes, in case of an emergency, taking too long to get to the hospital can kill you. But also, the wrong medical care can kill you.
I am talking from experience. No, I was not killed, but almost. Has a gall bladder problem and was going to Parkway, they had done ultrasounds and other tests and decided to put me on antibiotics. Said if it was not better in 2 or 3 days, they would do more tests. Also said that if it got worse, to go back right away. It got worse at 11 pm, I called them and as they do not have emergency, they said to go to Hua Shan foreign section. Which I did. The first couple of doctors they brought in did not speak English. Then a surgeon came who said I was ok and to go home. I was not ok!!! So I stayed, they refused to admit me because I was okay. Didn’t give me pain medicine either. At 8 am I went to Parkway and my gall bladder was just about to burst. Had surgery and survived. A couple more hours and I could have died.
And Hua Shan aint cheap either!!! Seeing Chinese doctors with no english, getting an ultrasound, the wrong diagnostic and some regular antibiotics cost around 3000 kuai. Not cheaper than Parkway I think (not sure cause have direct billing there).
The other day, my daughter ended up with fever at the Children’s Hospital. Blood test — infection. She needs antibiotics. And they brought her PILLS!!! She is 2 years old!!!! I yelled at them and they apologised, it was a mistake!!! What if i didn’t know and had given them to her???
I think it is important to know what are the limitations of hospitals in China and to have a plan in case of an emergency that cannot be handled here.
Not thinking about it and saying local hospitals are okay is not an option. I heard people say that if they can take care of emergencies for Chinese people, they can do it for foreigners too. WRONG!!! They do not take care of every emergency for Chinese people. And, if a Chinese person has the bad luck to have something they cannot handle — they die. Fortunately, for foreigners, there is the emergency evacuation option. But we have to stay informed and be aware of what can and cannot be done here.
And to answer the question, the only place I would go and have gone to in case of an emergency is Shanghai United. I don’t like them, but they are my best bet. Or my children’s best bet. If it is during working hours and it is not very very urgent, I will go to Parkway.
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