# UAE Tax Liabilities For US Nationals



## Gavtek (Aug 23, 2009)

There's a few Yanks on here so may get a better answer more quickly than I will trawling Google!

I understand that US Nationals moving to the UAE still have to pay a tax liability of some sort to the US Government?

If so, as a very rough guide, what do you reckon the liability would be for someone coming here form the US (Houston) and being paid around $200k/annum?


----------



## pamela0810 (Apr 5, 2010)

Just checked with a colleague of mine....

If he is earning USD 200k per annum, he will get an exemption of 91k. This is not including the deductions such as mortgages, etc. So in essence, he will only be taxed 109K and then further deductions. However, to be eligible for this exemption, the individual will need to be out of the country for 322 days in a year.

So, this person will not be eligible for the exemption while filing his 2010 taxes but if he joins in January 2011, he will be able to make use of the exemption while filing in April 2012 for the previous year.

Hope this helps. I'm sure the Yanks will further elaborate


----------



## Bevdeforges (Nov 16, 2007)

Basically, as a US citizen (or green card holder) you are always liable for US income taxes, no matter where in the world you live. As pamela has mentioned, there is an Overseas Earned Income Exclusion of about $90K available once you have established eligibility according to either the "bona fide resident" or "physical presence" tests.

Details are in IRS Publication 54, available on the IRS website.

The exclusion applies only to earned income (i.e. salary). You pay your full taxes on any interest, investment income, rents, etc. The first year you are abroad, you generally file for an extension on your tax filing date until you have fulfilled the "one year abroad" requirement. (You can't take the exclusion until you have met the eligibility tests, which include having been outside the US for a full year - either calendar year or 12 consecutive months.) You then can take a pro rata exclusion against the portion of your first year's income that was earned while living abroad.

It sounds more complicated than it is. Pub 54 explains how all this works, including how to apportion your deductions between the exclusion and the rest of your income.
Cheers,
Bev


----------



## Gavtek (Aug 23, 2009)

Thanks, I found that publication, it explains quite well what amounts are taxable, but I'm still unsure what the general rate of tax is (I'm aware it's very rarely that simple to calculate). Any ball park figures?


----------



## Bevdeforges (Nov 16, 2007)

Gavtek said:


> Thanks, I found that publication, it explains quite well what amounts are taxable, but I'm still unsure what the general rate of tax is (I'm aware it's very rarely that simple to calculate). Any ball park figures?


There isn't a "general" rate of taxation, just the rate tables, which depend on your filing status (i.e. married, single, filing jointly, filing separately, head of household, etc.), and to a large extent on your deductible items - or if you take the standard deduction in lieu of itemizing. 

Basically, in the example you give ($200K income), just subtract the $91 exclusion and look up your tax rate in the tables according to your filing status. It will be high, as most US nationals have a number of deductions and credits up their sleeves that should help to lighten the tax burden a bit.
Cheers,
Bev


----------



## md000 (Dec 16, 2008)

*on the safe side....*

Hire an accountant that has experience in international taxation. 

Here's a simple breakdown of what I pay:

6% on every dollar up to $91K US - including all extras given to me: housing, plane tickets, etc. This covers social security and medicare, which from what my tax accountant has indicated - I am required to pay. I don't know many other people that pay this, but I want to go by the letter of the law (i.e. I don't want my assets seized if/when I ever decide to go back to the states). The reasoning I have received for this is that the UAE does not have a required pay-in for these services for all residents/nationals (unlike Germany, for example). 

about 35% on every dollar over $91K US - same extras as before.

Then, come the crazy deductions. 

Again. hire an accountant and don't do it yourself. Make one stupid mistake by skimping on a few bucks and you could land yourself in jail or worse. The IRS (and Saudi religious police) are the only government entities that I wouldn't mess with.

-mike/md000


----------



## tonichiwa (Nov 17, 2010)

*US citizen taxation*

Hi everyone,
Anyone with advice, IRS facts, etc for a US citizen who gets a UAE residence visa. What are our tax obligations? 
I'm considering taking a permanent job here in UAE, but need to know what my taxes will be in US. 
Thanks for any comments.


----------



## Maz25 (Jul 6, 2008)

I would advise that you do a search as this topic has been discussed extensively in a number of threads.


----------



## tonichiwa (Nov 17, 2010)

not to complicate things, but can anyone help with this scenario? 
I am a dual citizen, US and Greek. Can I choose which country I want to pay taxes in if I become a resident of UAE?
Please help!


----------



## md000 (Dec 16, 2008)

tonichiwa said:


> not to complicate things, but can anyone help with this scenario?
> I am a dual citizen, US and Greek. Can I choose which country I want to pay taxes in if I become a resident of UAE?
> Please help!



As I've mentioned in previous posts on the forum:

If you are an American citizen OR American greencard holder, you MUST file for taxes - NO MATTER WHAT - in America. I would advise you (as I've posted previously) to find a tax accountant IN America to handle this for you. If you need the name of a quality tax accountant that can handle overseas taxes, please private message me. 

Having an American citizenship has certain benefits, but it also has certain requirements. Paying taxes on EVERY CENT of income you make around the world is one of them (Yes, you may argue that there is a tax credit if you make less than $90K/yr - but that credit does not cover the 6% you are legally obligated to contribute towards Medicare and Social Security).


----------



## Monalisa (Jun 14, 2008)

Bevdeforges said:


> Basically, as a US citizen (or green card holder) you are always liable for US income taxes, no matter where in the world you live. As pamela has mentioned, there is an Overseas Earned Income Exclusion of about $90K available once you have established eligibility according to either the "bona fide resident" or "physical presence" tests.
> 
> Details are in IRS Publication 54, available on the IRS website.
> 
> ...


Hello all, I would really appreciate your help with something regarding the subject.
If someone went to Dubai end of July 08, started working end of August 08.
Worked form Aug 08 till June 25, 2009.If money made was less than the $70 K.
How would it affect US tax ?
What if it didn't get filed yet?
I thank you for providing this forum for people to get help with issues they face.
Best wishes for you.


----------



## Jynxgirl (Nov 27, 2009)

Monalisa said:


> Hello all, I would really appreciate your help with something regarding the subject.
> If someone went to Dubai end of July 08, started working end of August 08.
> Worked form Aug 08 till June 25, 2009.If money made was less than the $70 K.
> How would it affect US tax ?
> ...


If in a 365 day period, you are in the usa more then 32 days (I think it is 32 but might be 31 to 33 or 35?? ) then you owe taxes on it. When did you leave in July? And 07... over 3 years, you might have issues!!!! To file now, they are going to flag it most likely!!


----------



## md000 (Dec 16, 2008)

I don't really get it.

Read the final page of your passport: "All U.S. citizens working and residing abroad are required to file and report on their worldwide income." How unclear is that? Yes, there are credits for working overseas. Yes, you will not have to pay anything if you make under $90K (around there). But, YOU STILL HAVE TO FILE.

Ok. Ok. I am assuming that you make more than $18,700/yr as a married couple or $9350/yr as a single person. But, to live here, you really need to make a ton more than that. READ THIS: Publication 54 (2010), Tax Guide for U.S. Citizens and Resident Aliens Abroad 

The penalties are quite severe if you don't pay. If you fail to file in a year and you let it build up, the interests and penalties will just increase overtime. I hate to be a Debby Downer, but the IRS is pretty damn serious.

GET AN ACCOUNTANT. They aren't that expensive, you are just too damn cheap.


----------



## Monalisa (Jun 14, 2008)

Thanks for the help.will check with an accountant


----------



## MetalMeo (Sep 7, 2010)

i have an accountant i use in the state if u want his info. I usually paid him around $400 to file my tax, and he specialize in expat tax.


----------



## Jynxgirl (Nov 27, 2009)

It is very easy to file these if you are under 90,000, and even if your income goes up a bit more, it still is not so difficult to do your own expat taxes. It is when you get over like 130,000 that you might want to get an accountant to find everything you can to only pay what you legally have to. 

At this point, I would opt for an accountant if I were you. That cost above seems a bit high. We have only ever paid about 125$ in the past for the 'simple' expat taxes. That has been a few years though. I did my own last year as my first year as a single expat on my own  Was not hard at all (plus my mom works for the irs so she sent me the exact forms  )


----------



## suzeq (Sep 13, 2010)

md000 said:


> Hire an accountant that has experience in international taxation.
> 
> Here's a simple breakdown of what I pay:
> 
> ...


Any reccommendations on accountants???? Thanks!


----------



## suzeq (Sep 13, 2010)

MetalMeo said:


> i have an accountant i use in the state if u want his info. I usually paid him around $400 to file my tax, and he specialize in expat tax.


I would LOVE the accounts info. Thanks!


----------



## md000 (Dec 16, 2008)

*Accountant Recommendation*

Since I've been asked a few times in PMs, I use and recommend:

Thad Foster
from Nelson CPAs
[email protected]
+1 (303) 804-0362

He is physically located in Denver, CO. I've met him once in person and we communicate via email the rest of the time.

You may be able to find "cheaper", but I'd rather go with a personal referral (how I met the company he works for) and pay a bit more.


----------



## Bevdeforges (Nov 16, 2007)

Monalisa said:


> Hello all, I would really appreciate your help with something regarding the subject.
> If someone went to Dubai end of July 08, started working end of August 08.
> Worked form Aug 08 till June 25, 2009.If money made was less than the $70 K.
> How would it affect US tax ?
> ...


Just to answer the question here - it depends. If you left Dubai to return to the US on June 25, 2009 then you didn't fulfill the overseas requirement to take the exclusion for either 2008 or 2009. You should have declared and paid US income tax on everything you earned while overseas. (There are some possibilities of deducting part or all of your expenses as "business travel expenses" during that time.)

If you haven't returned to the US yet, I would still file returns for both 2008 and 2009 pronto.
Cheers,
Bev


----------

