# What is tax deductible for US citizens in Dubai?



## Seamus0624 (Jun 22, 2013)

Can a US taxpayer deduct any costs assoiciated with housing over and above what is reimbursed by an employer?
Can a US taxpayer living in Dubai deduct unreimbursed tuition costs incurred in Dubai? In total or a percentage? Is a partial employer reimbursement considered earned income?
Is a car allowance considered earned income if administedered through payroll as a specific line item?
I do not own property in the US? Do I have to pay local taxes if I use a family members address for a bank account puropses only in Pennsylvania?
I am being paid in AED as a local with some expat benefits so I will not get a W2.

Thanks!


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## earthworm88 (Jun 14, 2013)

Seamus0624 said:


> Can a US taxpayer deduct any costs assoiciated with housing over and above what is reimbursed by an employer?
> Can a US taxpayer living in Dubai deduct unreimbursed tuition costs incurred in Dubai? In total or a percentage? Is a partial employer reimbursement considered earned income?
> Is a car allowance considered earned income if administedered through payroll as a specific line item?
> I do not own property in the US? Do I have to pay local taxes if I use a family members address for a bank account puropses only in Pennsylvania?
> ...


Here are some reference articles 

Foreign Earned Income Exclusion - IRS Form 2555

Foreign Housing Exclusion or Deduction

To answer your question about using a family member's address: You don't have to pay any taxes (federal or state) as long as you meet the bona fide residence test or physical presence test, regardless if you have bank accounts back home.


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## Seamus0624 (Jun 22, 2013)

Many thanks


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## earthworm88 (Jun 14, 2013)

Seamus0624 said:


> Is it worth a premium for a private pool when considering villas in Spring/Meadows? Is joining a pool in the community just as good? What about pool maintenance, is it landlord or tenant responsibility typically?


Hi Seamus, you may want to repost this question as a different thread and I am sure you will get a lot of replies.

I don't have much experience with private pools, but have heard enough horror stories that I personally would stay clear of them. If you are budget conscious and can't deal with extraneous expenses, you may want to consider a community pool instead. The particulars about the pool should be in your contract, but I know of people who got stuck with large bills because of poor quality construction and the subsequent issues, and LL refused to pay at the end. If a pool is a must for your family, you just need to make sure the contract states the responsibilities clearly.

On the subject of taxes, if yours is complicated, I could recommend a tax accountant who specializes in expat income tax returns for US citizens. We used her for the first year, but were able to do our own in the subsequent years when they become more straightforward. 

Cheers!


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## Bevdeforges (Nov 16, 2007)

earthworm88 said:


> To answer your question about using a family member's address: You don't have to pay any taxes (federal or state) as long as you meet the bona fide residence test or physical presence test, regardless if you have bank accounts back home.


Actually, that's not quite the case. If you meet the bona fide residence test or the physical presence test, you can exclude up to the first $95K or so of *earned* income via the Foreign Earned Income Exclusion on your federal income tax forms.

You should not have to pay any state taxes based on an address you are using as a mail drop back in the States. A few States, however, can get sticky about things if you have certain types of assets in the state while residing abroad. 

If you have sufficient interest or other investment income in accounts in the US (or elsewhere) you may wind up having to pay federal income taxes on the amounts.

Best place to read up on this is IRS Publication 54 for Overseas Taxpayers.
Cheers,
Bev


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## earthworm88 (Jun 14, 2013)

Bevdeforges said:


> Actually, that's not quite the case. If you meet the bona fide residence test or the physical presence test, you can exclude up to the first $95K or so of *earned* income via the Foreign Earned Income Exclusion on your federal income tax forms.
> 
> You should not have to pay any state taxes based on an address you are using as a mail drop back in the States. A few States, however, can get sticky about things if you have certain types of assets in the state while residing abroad.
> 
> ...


Bev, you are absolutely right. Thanks for the correction. I read Seamus' question in the purest form when he mentioned that he didn't own any properties back home but is simply using a family member's address for some banking purposes. I had included the article for the maximum tax free allowance for 2013 and assumed that one would know any amount beyond the allowance is taxable regardless of where the money comes from (ie bank interests). Thanks for the clarification. 

Cheers,
EW


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## Bevdeforges (Nov 16, 2007)

earthworm88 said:


> Bev, you are absolutely right. Thanks for the correction. I read Seamus' question in the purest form when he mentioned that he didn't own any properties back home but is simply using a family member's address for some banking purposes. I had included the article for the maximum tax free allowance for 2013 and assumed that one would know any amount beyond the allowance is taxable regardless of where the money comes from (ie bank interests). Thanks for the clarification.
> 
> Cheers,
> EW


You probably already know this, but just to clarify - your bank interest and other "unearned" income does NOT fall under the Foreign Earned Income Exclusion. But for most folks, the personal exemption plus the standard deduction are enough to cancel out interest income for taxation purposes. (You can take the itemized deduction, but if you do, you have to apportion your deductions between the income you've excluded and the unexcludible income. It's a messy calculation and best avoided if you can do so.)
Cheers,
Bev


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