# Tax question - US Citizen in UAE



## ktwalsh (Oct 13, 2016)

Hi - I've read through a lot of the message boards on taxation, and hope that someone can answer a couple of questions I have / confirm my information as being (mostly) accurate. I will be employed by a UAE-based, UAE-owned private company with no ties to the US as far as I know.

So, suppose I have a salary of $200,000 US - I can use the Foreign Earned Income Exclusion to eliminate taxation on the first $101,000. Then, I can exclude my housing costs of, say, $30,000 US Minus approximately $16,000 base housing (excluding about $14,000 from taxation).
So, I then I am taxed by the US at about 33% on the about $84,000 that's left?
Here is my BIG question that I can't find the answer to:
Do I have to pay US Social Security and Medicare? if so, do I have to pay as if I'm self-employed (double, or ANOTHER 15.3%) out of my salary?
I always said that if I was complaining about how high my tax bill was, I should shut up, because that is a good problem to have - but it is still confusing and irritating.
THANKS!


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## TallyHo (Aug 21, 2011)

I've worked with a number of Americans over the years.

My understanding is that if your salary is $200,000 USD, then after you've deducted what you can, the remaining is taxed at the tax rate for $200,000, not the tax rate for $84,000 (if there is a difference in the rates, I'm sure there is). 

Social security and medicare: no.


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## XDoodlebugger (Jan 24, 2012)

ktwalsh said:


> So, suppose I have a salary of $200,000 US - I can use the Foreign Earned Income Exclusion to eliminate taxation on the first $101,000. Then, I can exclude my housing costs of, say, $30,000 US Minus approximately $16,000 base housing (excluding about $14,000 from taxation).
> 
> So, I then I am taxed by the US at about 33% on the about $84,000 that's left?
> Here is my BIG question that I can't find the answer to:
> ...


The first piece of advise is to get a tax accountant that has overseas experience, the government is making it a pain in the ass to be an expat any more.

Excluding housing on your taxes is one part, but if you then get housing provided you have to add that benefit back in as if it were salary. I have a salary over my exemptions (the first $101k, personal deduction and daughter education deduction) then I have a housing paid and a car provided, my tax accountant counts that as income above my salary.
See my first paragraph, let an expert handle it, this is not the 1040EZ form.

You no longer will have to pay Social Security or Medicare taxes, if you have over 40 quarters of contributions (10 years) you will still get benefits when you move back home. One nice perk we still have,


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## Fat Bhoy Tim (Feb 28, 2013)

Or if you're me, forget to file some years and send it later, because the IRS just looks at it and laughs.


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## Visp (Mar 23, 2013)

If you're making 200 grand a year you can afford a tax attorney to properly answer these questions.


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## akpaddlegirl (Jan 6, 2014)

Can anyone recommend a tax attorney here in Dubai? I'm still fairly new here, but have recently gotten married, so my entire tax world is about to change when I file next. Thanks for the help.


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## twowheelsgood (Feb 21, 2013)

Nikkisizer maybe - she is on this forum.


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## akpaddlegirl (Jan 6, 2014)

Thank you. I'll try to get in touch with her.


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## rsinner (Feb 3, 2009)

akpaddlegirl said:


> Thank you. I'll try to get in touch with her.


she is a UK tax expert, while you have a US flag.


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## akpaddlegirl (Jan 6, 2014)

Right. That won't be of much use to me then. I should have been more specific. Thanks anyway. Cheers.


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## XDoodlebugger (Jan 24, 2012)

akpaddlegirl said:


> Right. That won't be of much use to me then. I should have been more specific. Thanks anyway. Cheers.


I can recommend a US based tax accountant if you PM me, I just do everything over email.


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## VIP 8 (Aug 30, 2017)

This may have the answer:

Social Security Tax Consequences of Working Abroad

(It also mentions Medicare.)


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