This is a great site and thanks in advance for your advice. I am trying to determine tax implications if I take up a full-time job in China (I am a US Citizen). Here is the example scenario.
Annual Salary+Bonus (Excluding expenses paid by company for rent/school etc.) - $200K
Taxes paid in China@20% - 40K
US tax calculation (approximate)
200K-108K(FEIE) = 92K
US taxes on the remainder = 92K*33% = 30K (approx)
China taxes already paid on remainder = 92*20% = 18K (approx)
Approx. Net US Tax payable = 30K-18K = 12K
Is this correct that I will have to pay the difference in income tax over 108K to the IRS?
Also, for tax purposes, does IRS consider actual Rent/School expenses paid by employer as income (this will not be considered income by the Chinese government AFAIK). tI would help me figure if this is a good offer or now. Thanks.
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