Timabee wrote:My apologies for going a bit off topic but I have a question about U.S. taxes for American citizens living in Taiwan. I am a 52 y/o, married with 2 children. Still living and working in the U.S. but expect to move (retire) to Taiwan within the next 5 years (wife is Taiwanese). U.S. income from pension etc. will be > $50K - $60K per year. I expect income from Taiwanese sources will be minimal. Is tax treatment of U.S-based income of persons living abroad (e.g. deductions, tax rates) the same as living in the U.S. Thanks for any guidance you can provide.
Here's a sexy article which you need to become very familiar with. Foreign Earned Income Exclusion
You can exclude up to a certain amount of your foreign earned
annual income from paying taxes. However, you can't include any US based income from your pensions, or self-employed income earned in Taiwan with this exclusion. Only income earned in Taiwan from a Taiwanese owned company counts toward the Foreign Earned Income Exclusion.
So, all your income from the US and any self-employed income in Taiwan will be taxed by the US the same as if you were living in the US regardless of the fact that you anticipate you'll be living in Taiwan.
US Internal Revenue Service wrote:If you are a U.S. citizen or a resident alien of the United States and you live abroad, you are taxed on your worldwide income. However, you may qualify to exclude from income up to an amount of your foreign earnings that is now adjusted for inflation ($91,400 for 2009, $91,500 for 2010, $92,900 for 2011, $95,100 for 2012). In addition, you can exclude or deduct certain foreign housing amounts.