Quote:
Originally Posted by Global
G'day.
I'm a US citizen considering a 6 - 12 month consulting gig in SA as an independent contractor.
- Working for a SA company
- Paid in ZAR, 127K a month
- living, transportation and other expenses to be negotiated
I understand the pluses and minuses of SA's major cities.
The US IRS will exclude about the first $90K (USD) for US income tax purposes.
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Be careful - this is NOT necessarily so. You cannot exclude the $90K unless you fulfill the requirements for either "bona fide resident" or "physical presence" test. Both of those include working outside the US for a full 12 months (either 12 consecutive months or one full calendar year). If your assignment is any less than 12 months, you don't qualify for the exclusion and you pay your regular taxes to the US. (Your assignment will be considered to have been an "extended business trip" - which could make some of your travel and accomodation expenses deductible.)
All living and transportation expenses plus any remuneration received in kind (say, a company car or housing) is taxable.
That said, there are tax provisions to assure that you aren't double taxed on your income. If your income from this assignment is taxable in the US, chances are it won't be taxable in SA, though I'm not at all familiar with SA taxes so can't advise you whether or not you will need to file to claim this exemption.
Cheers,
Bev