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Lev, Tax Advisor
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Experience:  Taxes, Immigration, Labor Relations
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Hello I am thinking about accepting a position in malaysia

Resolved Question:

I am thinking about accepting a position in malaysia and I have a couple of tax questions.
I will be here for 2 years on a proffesional visa. My salary will be 75000. I work for an American based airline out of Norwalk CT. I was told by others that if I am out of the U.S. for 335 days in a year I will be tax exempt. I left the country in March so I think if I file in april 2011 I should be exempt for 10 months. If I am going to be out of country and meet the exemption requirements should I change my status on my w-4 to exempt? I am a MI resident currently. What if any exemptions do I qualify for for MI state taxes? Finally what tax obligations will I have to malaysia under a proffesional visa. The company is also providing housing that they are going to pay at around 1000.00 a month directly to the person I rent from. Thank You Mike
Submitted: 6 years ago.
Category: Tax
Expert:  Lev replied 6 years ago.

As an US person living abroad - you may claim a foreign earned income exclusion.

The person may qualify for the foreign earned income exclusion - he/she should:
-- Work and reside outside the United States for at least 330 days during the year, or
-- Meet either the Bona Fide or Physical Presence tests.
If the person qualifies, he/she may exclude up to $91,500 (2010 in foreign wages -- plus housing allowances (limited to 30% of the earned income exclusion).

To receive that exclusion - the taxpayer should file either form 2555 or 2555EZ.

Here are forms you likely need:

Please be aware that - the exclusion above will not affect self-employment taxes - only income taxes. Only earned income is excludable - income from wages and self-employment. For instance - dividends, investment income, rental income, etc - are not excludable.

Please also be aware that this credit is not granted automatically - you need to file a tax return and claim the credit.


Considering your situation - as you left US on March 1, 2010 - you need to be in a foreign country at least 330 days between March 1, 2010 and March 1, 2011.

The amount you may exclude in 2010 will be 305 (days in a foreign country) / 365 * $91,500


Generally, as you will be in Malaysia for at least 182 days in a calendar year - you will be considered a tax resident. A resident individual is taxed on his chargeable income after deducting personal reliefs at a graduated rate from 0% to 27%.

The chargeable income of resident individuals is computed by deducting the personal reliefs from the total income. -


If the same income is taxable in the US and in a foreign country - you may claim a credit for taxes paid in a foreign country on your US tax return.

To determine the amount of credit -the person should use the form 1116 and attach it to the tax return. -

Here are instructions -


You might find helpful IRS publication 519 -

Let me know if you need any help.

Customer: replied 6 years ago.
Can you give me an estimate on where I will fall in the 2 to 27 percent that will have to pay malaysia. salary 75,000 yearly with 1000.00 a month for housing paid by company directly to the land lord.
Customer: replied 6 years ago.

Hello LEV,


I have never used answer before not sure if you received my reply.



Expert:  Lev replied 6 years ago.
Sorry for delay.

1 MYR = 0.31 USD, so $75000 = 238,762 MYR
minus personal relief 8,000 MYR - your expected taxable income 230,762 MYR
I was not able to access the official tax site - -

The resident individual tax rates are as follows:
on the first 150,000 27,975MYR
on the next 100,000 27%
Above 250,000 28%
See for reference - Malaysia Tax Guide

I may not comment how housing paid by the company directly to the landlord would be treated in Malaysia.
In US that payment should be included into your wages.

Lev and 4 other Tax Specialists are ready to help you

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