Have a Finance Question? Ask a Financial Expert Online.
Thank you for your question, and thanks for using JustAnswer.com
to confirm, this is for the US tax obligation, correct?
You are only wanting information about the US, correct
You can exclude up to $99,200 from your taxable income through the foreign earned income exclusion. This will reduce your overall tax. This means you do not pay tax on this amount of money.
If you make more than that, then you can take the foreign tax credit for the amount of income that you did not exclude.
This will reduce your tax and minimize the effects of double taxation.
What about housing expenses?
I thought those were also deductible; also Bharian has no tax treaty so am I also obligated to pay social security?
You would not pay self employment taxes on the excluded income, just on anything above that amount.
Housing is excluded as well separately from income
so to be clear in addition to the tax due, I also have to pay 15% (for social security) on my NON excluded income up to the annual limit?
That would be correct.