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Discussion Starter · #1 ·
I work as a remote consultant based in Dubai for a US company. They use a local staffing agency for my visa and payroll etc. However, the staffing agency wants them to pay a very high processing fee every time for reimbursement of traveling expenses. My employer wants to pay me directly but to my US bank account. Are there any income tax implications or IRS issues that i will run into? I am a US citizen but i reside in UAE. This is just reimbursement, so there should not be any tax on it anyways. What do you think?
 

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Originally from UK but lived in many countries
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Hi,
From what I understand, the U.S. taxes its citizens on worldwide income.
It therefore would not matter where you received money from or where it was remitted - you just have to account for it correctly on your U.S. tax return and make sure you don't get taxed on allowable, deductible business expenses.
Cheers
Steve
 

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I'm no tax expert but there could be a few things you might want to discuss with your employer's accounting/finance dept. and/or an accountant who knows a thing or 2 about Foreign Earned Income(FEI)

Basically you want to verify how those payments will be classified by your employer.

If it's just remitted to you and viewed as regular income, it could put your income beyond the threshold of the FEI exclusion for the tax year.

If it's not classified as earned income it cannot be claimed on the FEI exclusion.

Such is the stupidity of how elaborate our tax system is. Used the word "could" several times above. If the reimbursement is a significant amount, best to check with your tax professional who specializes in FEI
 

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Discussion Starter · #4 ·
I'm no tax expert but there could be a few things you might want to discuss with your employer's accounting/finance dept. and/or an accountant who knows a thing or 2 about Foreign Earned Income(FEI)

Basically you want to verify how those payments will be classified by your employer.

If it's just remitted to you and viewed as regular income, it could put your income beyond the threshold of the FEI exclusion for the tax year.

If it's not classified as earned income it cannot be claimed on the FEI exclusion.

Such is the stupidity of how elaborate our tax system is. Used the word "could" several times above. If the reimbursement is a significant amount, best to check with your tax professional who specializes in FEI
Thanks!
 
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