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Megan C
Megan C , Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 16539
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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I have been offered a position in bahrain. Is their a quick

Resolved Question:

I have been offered a position in bahrain. Is their a quick way I could calculate the tax implications and how could optimize my salary vs my housing allowance so I can minimize my taxes?
Submitted: 2 years ago.
Category: Finance
Expert:  Megan C replied 2 years ago.

Megan C :

Thank you for your question, and thanks for using JustAnswer.com

Megan C :

to confirm, this is for the US tax obligation, correct?

Megan C :

You are only wanting information about the US, correct

Megan C :

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.

Megan C :

If you make more than that, then you can take the foreign tax credit for the amount of income that you did not exclude.

Megan C :

This will reduce your tax and minimize the effects of double taxation.

Customer:

What about housing expenses?

Customer:

I thought those were also deductible; also Bharian has no tax treaty so am I also obligated to pay social security?

Megan C :

You would not pay self employment taxes on the excluded income, just on anything above that amount.

Megan C :

Housing is excluded as well separately from income

Customer:

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?

Megan C :

That would be correct.

Customer:

Thank you

Megan C and other Finance Specialists are ready to help you
Expert:  Megan C replied 2 years ago.
Thanks, Sanjay for your positive rating. Please come back and visit me for any of your tax, finance, or social security needs. It was a pleasure working with you today.