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I have an S corp here in California. A company who I have

I have an S corp...
I have an S corp here in California. A company who I have done business with has offered me a position in their Hong Kong Operation which requires relocating to Hong Kong. Which is the most advantageous way to handle this from a tax standpoint. Should the HK company pay the S corp for services and just continue to invoice them each month for services etc or do I "go on the payroll" for the HK company and be treated like a W2 employee (understanding they don't have W2s etc...).
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Answered in 4 minutes by:
9/18/2013
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 16,245
Experience: 15years with H & R Block. Divisional leader, Instructor
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Robin D. :

Hello and thanks for trusting me to help you today. I am a tax adviser with over 15 years of experience.

Robin D. :

Under either you will be taxed in on the whole. If through the S corp you will pay yourself the regular wages (W2 for S corp) and the profits will be passed to you form S corp. That will mean self employemnt to still pay in US. If W2 then you will not be paying into SS in US so you will lose years of contributing to SS for future.

Robin D. :

You will be able to use the Form 2555 to exclude in either situation and housing.

Robin D. :

Hong Kong has it's own taxation and it may be easier for you to enter and work if sponsored by a resident company as an employee.

Robin D. :

That though is an immigration issue and the company that wishes to employee your services should be able to advise and assist on their end.

Robin D. :

My goal is to give you excellent service. If you are satisfied, please rate me. If you have follow-up questions on this same topic, use the reply box below. To start a new conversation with me on a new topic request me again.

Customer:

Thank you for your information and assistance!

Robin D. :

Your positive rating is always thanks enough.

Robin D. :

Thank you for requesting me

Robin D. :

I really enjoyed working with you – please feel free to request me again when you come back to ask another question.
You will find the request feature when you come back under your MY QUESTIONS section.

Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 16,245
Experience: 15years with H & R Block. Divisional leader, Instructor
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William Ellis, CPA
Category: Tax
Satisfied Customers: 296
Experience: Over 15 years of experience in public accounting
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Hello and thank you for allowing us at Just Answer to assist you. In addition to what Robin told you, if, within your S-Corp, declare and fund a SEP, this could lower your US taxes quite a bit. Plus, any foreign income tax you do pay will be eligible to claim as a tax credit on your Form 1040. If this position is medium- to long-term, you would be able to exclude at least a portion of your foreign earnings a short while after establishing residency.

 

Thanks,

Bill

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