[jdelrey83]

So I have been doing a lot of reading about taxes and such and understand the tax laws of an American where the first 95k are non taxable. I spoke to a buddy of mine who worked overseas for quite a while (not in Dubai) and he had a pretty hefty tax bill when they came back. How come this is not something I see talked about on here. Is this something that does not need to be worried about in Dubai.

 

[fcjb1970]

So I have been doing a lot of reading about taxes and such and understand the tax laws of an American where the first 95k are non taxable. I spoke to a buddy of mine who worked overseas for quite a while (not in Dubai) and he had a pretty hefty tax bill when they came back. How come this is not something I see talked about on here. Is this something that does not need to be worried about in Dubai.

It all depends on where you live overseas. If you live in a country that has taxes and a tax treaty with the USA than you need to pay tax on your income below $92,900. You have a Foreign Earned Income exclusion of $92,900. You have to meet specific criteria for your income to qualify as FEI. There are many reasons your friend may have still been obligated to pay taxes under the tax law.

If you truly live in Dubai, by the IRS standards, than yes the first $92,900 of income is not subject to federal income tax for the current tax year. That amount goes up a bit every year.

I would talk to a tax professional and not trust people on a forum about your specific tax liability. Depending on the state you are from you may have state tax liability.

 

[jdelrey83]

Understand but I am also told that there are also taxes that may be due when returning to USA depending on housing allowances, salary, etc.

 

[fcjb1970]

If you file annually and pay your correct taxes, than everything is hunky dory. If someone had a hefty tax bill after they returned I would guess it was because they did not pay their correct amounts while they were overseas and had to make up the difference.

If you have a specific question I would ask it on the tax forum Expat Tax - Expat Forum For Expats, For Moving Overseas And For Jobs Abroad

Again, do not take my word, if you want to understand your specific situation ask a tax professional. The IRS does not accept, 'someone on Expat Forum told me,' as a defense.

 

[jdelrey83]

Fc - thank sand I would tend to agree with you on your last sentence about IRS