Hi, I'm going to be working in Asia this summer for Lehman. I was wondering how taxation works for US Citizen-Summers working in Asia? Just curious cause I was doing my taxes today. Thanks!
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my friends from australia who worked in hk for summer only got their pay taxed by hk authorities and didn't have to pay any tax in Aus. so im guessing you probably don't need to declare your income in the states. unless US and HK don't have double taxation agreements.
I'm not exactly sure what you need to do, but I'm pretty sure sashimi is completely wrong. Unlike the citizens of just about every other country in the world, US citizens are still required to play income taxes when they work abroad.
you definitely have to pay taxes in the US, but you get a deduction on your tax return for taxes paid in HK.
your first $82,400 or so is tax-free; there is a new law passed by Bush that will increase the tax you pay when working aboard; hope that helps.
As summer analyst, your wage will generally not incur any HK tax liability or at most 50-100 US dollars.
I knew some companies do not issue W-2 form though, so some may have the option simply not reporting that, but that is technically illegal.
So pretty much, it's the same as working in the US. Bummer, I was really excited about the low income tax in Asia.
Just out of interest how much do americans abroad pay in tax? I remember in school lots of my friends parents had to pay and were always complaining. It seems pretty rediculous to me.
The foreign tax credit helps a bit, but only really if the tax rates in the foreign country are comparable to those in the United States. I don't think it would help much in HK. For someone living in the UK though, it would probably eliminate your US tax burden.
http://www.wwwebtax.com/credits/foreign_tax_credit.htm
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