tax question, please help

Shanghai Expat Forum Index » Hot Topics Forums » Visas, Taxes, and Legalities

Author

Message

kkchen

Seeker

Joined: July 10, 2007
Posts: 57
Location: Shanghai
Status: Offline

Posted: Nov 01, 2007 - 09:47 AM
Post subject: tax question, please help

hey guys, heres my question:
I am a US citizen who just got my 1yr working visa with this local company started in June this year, they pay me in RMB (cash), however they do deduct an amount every month claiming it's income tax, and I definitely know that his got nothing to do w/ my US tax paying. So what should I do if I wanna pay the tax on my US account instead giving away the money to my company every month and who knows where the money went. Do I have to hire an professional to do this or what? Please advice, thanks

Missin
Reacher
Reacher

Joined: June 22, 2007
Posts: 245

Posted: Nov 01, 2007 - 10:02 AM

Not sure if you know this, but its payment for your Chinese income tax. Even though you're a US citizen, you're working in China and you will need to pay their income tax.

On another note, since you started in June, you may still have to pay US income tax since you won't be outside the US for more than 330 day in this or next tax year. Hope someone more qualified than myself can confirm this.

_________________
I am back! (sounds of crickets cricketing...)

p1atl10

Shanghai Royalty

Joined: Mar 18, 2005
Posts: 8585
Location: Shanghai
Status: Offline

Posted: Nov 01, 2007 - 12:38 PM

- Chinese Tax gets paid every month.
I am guessing that is the deduction they are currently taking.
- The first $82,000 of income is US Tax exempt. tax reciprocity agreement with China.

If Adjusted Gross Income is less than this amount.....no US Tax. But you still must file!!!!

Here is the tricky part. uncle Sam considers almost any part of foreign service assistance provided by your company as taxable income.
If you are receiving Housing Assistance, a COLA, Transp[ortation allowance....any of these things, they are considered taxable income, and added to your salary. So the $82,000 exepmtion can get pretty small in a hurry.

Best to consult a Tax Expert (KPMG, E and Y, etc) about your particular circumstances....as it gets complicated in a hurry. especially if you work for a local company whose knowledge of US Tax law could be spotty.

I have a private guy I have used for years as understands the in's and out's of ex-pat US Tax situation. Specializes in ex-pat clients. Travels over here annually to do their taxes. Based in San Jose.

PM me if you want a contact address

_________________
Not all chemicals are bad. Without chemicals such as hydrogen and oxygen, for example, there would be no way to make water, a vital ingredient in beer.....Dave Barry

hautumncloud
LoopKicker

Joined: Nov 04, 2006
Posts: 967

Posted: Nov 01, 2007 - 05:06 PM
Post subject: Re: tax question, please help

kkchen wrote:

You have gotten good advise here ^ ^, I see. Only thing I can think of in addition is to ask for a fa-piao for the portion of salary that was deducted as a proof that it was remitted to Chinese income tax office since you mentioned that you get paid in cash. Otherwise, what proof have you got that they made deductions and how are you going to know for sure it was remitted at all, on your behalf?