# Paying Taxes as a US Citizen in Dubai



## reembow

I am getting a lot of conflicting information on this topic. Some people say you don't pay taxes on the first 90K or so (depending on the year), other say you have to pay full taxes on all of it. I am assuming in both cases that you are a resident of UAE for over a year. 

So what is the deal, really? What does federal tax law on this? 

I have heard about the regulations about working overseas and income earned in a foreign country, but I have also heard that does not apply in Dubai since there is no income tax at all and the reason the law is in place is to prevent double taxation. 

This will make a huge difference in the salary I am willing to accept. 

Any help, please ? 

Thank you


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## Jynxgirl

Recent thread. http://www.expatforum.com/expats/du...20-us-citizen-working-dubai-tax-question.html

Suggest you get an accountant as well even though really isnt that difficult to do your own foreign income taxes. First time though is easier if someone walks you through and really shouldnt be that expensive. 

Cheers.


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## reembow

Thank you, Jynxgirl  I am still a little confused after reading that thread, tho, to be honest.... 

Why are you a huge anti-fan of Dubai, if you don't mind me asking ?


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## Bevdeforges

Download Publication 54 from the IRS website. The way US tax law is written, you must file a tax return each year based on your having US citizenship - it does not matter whether or not you are taxed on your income in the country in which you are living. 

The overseas earned income exclusion will allow you to formally exclude the first $90K or so of salary income. Normally you take a foreign tax credit against taxes paid against anything above the exclusion amount, but if you are in a country where there is no income tax, you pay US taxes on it. (But at least you're spared the AMT which would normally kick in when taking foreign tax credits!)
Cheers,
Bev


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## Jynxgirl

reembow said:


> Why are you a huge anti-fan of Dubai, if you don't mind me asking ?


Page 7 I think, April post is my five month post. I have a 3 month post as well. Pretty much everything is the same in my head. (I have mine set to have newest post first so think that is right). :ranger:

http://www.expatforum.com/expats/du...how-long-do-you-expect-stay-dubai-uae-21.html

Everything that glitters ain't gold. 

There is no better place for that saying then the UAE. 

I hope you enjoy the uae though.


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## reembow

Bev, 
Thank you for breaking it down for me. So you are saying that if I make 90k exactly- at a minimum- that translates to all that money going directly into my pocket (7500 dollars cash)? No deductions from that income at all?

Jynxgirl, 
I read your story about why you hate Dubai. I feel for you girl! I have a kitty too, so thank you for the warning about that !!!! And I am a single girl too... hate leering men more than anything. But if I get the right deal, I am getting my b*** out there. I want out of Virginia pretty bad!


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## Bevdeforges

reembow said:


> Bev,
> Thank you for breaking it down for me. So you are saying that if I make 90k exactly- at a minimum- that translates to all that money going directly into my pocket (7500 dollars cash)? No deductions from that income at all?


If you make less than the earned income exclusion amount, you simply declare your full income, take the exclusion (i.e. fill out form 2555) and you don't have to worry about itemizing (or not) your deductions. You pay no taxes to the US. (I refer to my filing as my "annual love letter to the IRS" - though starting next year that is due to change.)

As long as you make under the exclusion amount (and it's slightly more than $90K - the figure is adjusted each year), you're basically filing an "information return" only.

Things get a bit more complicated if you have sources of income other than your "earned income" (i.e. salary).
Cheers,
Bev


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