American Holding Tax?

This is a part of our Cambodia forums to chat about anything Cambodia-related. This discussion forum is at the top of our site because it's usually the busiest part of the expat community chatter with random topics on just about everything, including expat life, Khmer politics, Cambodian blogs we have or have come across, or whatever else our members want to discuss. Whether you're an expatriate, tourist, Cambodian or random traveler just passing through South East Asia, you are welcome to talk about anything or start new topics yourselves.
jmagic
Expatriate
Posts: 161
Joined: Fri Mar 31, 2017 5:41 am
Reputation: 48
Cambodia

American Holding Tax?

Post by jmagic » Mon Sep 18, 2017 2:40 pm

Are there any Americans here who have their salaries automatically deposited into a bank account for which they have signed an IRS tax form? When this happens stateside, the IRS withholds about 30% of the salary. Does this also happen here in Cambodia? (I have avoided this for a long time, but my trusty ABA bank is now demanding I sign an IRS tax form and my employer won't pay in cash or into my wife's account.) The experiences of any other Americans either paying or avoiding these taxes would be appreciated. :dragonchase:

Please, no smart ass and uninformative comments. (see below)
Last edited by jmagic on Mon Sep 18, 2017 3:03 pm, edited 1 time in total.
User avatar
tightenupvolume1
Expatriate
Posts: 1111
Joined: Sat Mar 25, 2017 10:29 pm
Reputation: 237
Location: london
India

Re: American Holding Tax?

Post by tightenupvolume1 » Mon Sep 18, 2017 2:42 pm

IE, how can i avoid paying tax.
charlie
a faint heart never fucked a pig
jmagic
Expatriate
Posts: 161
Joined: Fri Mar 31, 2017 5:41 am
Reputation: 48
Cambodia

Re: American Holding Tax?

Post by jmagic » Mon Sep 18, 2017 3:02 pm

I file my taxes every year, but I prefer not to give the US government an interest free loan of 1/3 of my income. Get it?
User avatar
tightenupvolume1
Expatriate
Posts: 1111
Joined: Sat Mar 25, 2017 10:29 pm
Reputation: 237
Location: london
India

Re: American Holding Tax?

Post by tightenupvolume1 » Mon Sep 18, 2017 3:25 pm

yep :hattip:

charlie
a faint heart never fucked a pig
User avatar
frank lee bent
Expatriate
Posts: 11287
Joined: Sat May 17, 2014 4:10 am
Reputation: 1996
United States of America

Re: American Holding Tax?

Post by frank lee bent » Mon Sep 18, 2017 5:01 pm

the threshhold for payment of tax is over 100 kPA for yanks.
you still have to file with the IRS no matter where you live.
the form they are asking you to sign is just part of the fatca legislation that the yanks impose on their free range slaves they grant a passport to.
so far, they have got no power to withold usa tax in foreign cuntries.
give them time- they may figure out a way if they don't fucking implode from imbecility first.
the Cambodian government is not answerable to them at this point- despite being the largest trading partner.
but they sent giant teams worldwide from the IRS to enforce this fatca shit on yankee slaves, cost a lot to the taxpayer to do this.
monomial
Expatriate
Posts: 65
Joined: Sun Oct 02, 2016 2:48 pm
Reputation: 17
Thailand

Re: American Holding Tax?

Post by monomial » Tue Sep 19, 2017 10:16 pm

A couple of mistakes you've made.

In the USA, the IRS does not withhold anything. Your employer withholds money and sends it to the IRS on your behalf based on your W9. You then get a refund or pay extra when you file your 1040 at the end of the year.

In Cambodia, there is no such withholding requirement for the IRS. There is a withholding requirement for Cambodian taxes however, which start at 10% and rise to as high as 20%. This has nothing to do with whether or not you are an American. Every resident in Cambodia pays the same.

The W9 from ABA that you were required to fill out is for FATCA compliance. This means they will report your account to the Treasury Department, not to the IRS. Of course, the US Treasury Department will likely share this information with the IRS, so it is a distinction without a difference. The point being however, is that this is done to make sure you honestly report your account on the FinCEN form 114 which you are required to file every year. This form was previously known as the FBAR. You have been filing your FBARs every year, right? They are a requirement for all Americans with assets overseas and the penalties for failure to file these forms are extreme. Much worse than the penalties for failure to file taxes, which are mild by comparison.

Finally, as an American you are taxed on your worldwide income, whether or not you lived in the USA. You must therefore file 2 tax returns. One to Cambodia, which your employer will do for you, and one to the IRS, which you must do yourself. If you pass the overseas residence test, then you are allowed to take the foreign earned income exemption for any money paid as a salary to you. This exemption is $102,100 USD for 2017. So unless you made more than this in salary, you do not owe the IRS anything.

For unearned income however, which means not from salary, you need to report how much you received and what the source was. If it was from things like non US stocks or mutual funds, overseas investments or real estate, you need to treat these as PFICs which are truly nasty things with horrific tax consequences. You will almost certainly need professional help to file your US taxes if you are receiving money as anything other than salary.

For just salary income though below the $102,100 threshold, you will not owe anything. The forms are a pain in the ass and you assume liability if you fill them out wrong, but otherwise you won't have to pay money.

If you haven't been filing your 1040 and FBAR (now FinCEN 114) forms every year, I suggest you hire a qualified tax attorney immediately to plead your case to the IRS and get current. You are in big trouble if you are caught, and as of last year the USA has the authority to revoke your passport if it is determined you own more than $50,000 in taxes and penalties. This is an easy threshold to cross, as the minimum penalty for failure to file an FBAR is $10,000 per overseas bank account per year.
jmagic
Expatriate
Posts: 161
Joined: Fri Mar 31, 2017 5:41 am
Reputation: 48
Cambodia

Re: American Holding Tax?

Post by jmagic » Wed Sep 20, 2017 7:15 am

Thanks for the helpful information guys.
User avatar
phuketrichard
Expatriate
Posts: 9311
Joined: Wed May 14, 2014 5:17 pm
Reputation: 1735
Location: the far side of the moon
Aruba

Re: American Holding Tax?

Post by phuketrichard » Wed Sep 20, 2017 8:44 am

2 more mistakes

1. you also need file the 2555 foreign earned income, which gives you out of country residency so u can qualify for the $102,000 tax deduction
2. you do NOT NEED FBAR UNLESS you hvae a total of $10,000 in all ur foreign accounts. something i make sure i never have..
FBAR Filing Requirements
By law, you must file The Foreign Bank and Financial Accounts form (FBAR) if both of the following are true:

You're a U.S. citizen or resident taxpayer or domestic business entity
You own or control foreign bank and financial accounts with a combined value over $10,000
In a nation run by swine, all pigs are upward-mobile and the rest of us are fucked until we can put our acts together: not necessarily to win, but mainly to keep from losing completely. HST
Post Reply Previous topicNext topic
  • Similar Topics
    Replies
    Views
    Last post