[penguinsix]

http://online.wsj.com/public/article...f_main_tff_top

The WSJ has an article that speaks about a new law signed the other day that drastically affect expats, especially those in higher income brackets. The article specifically mentions those in Hong Kong could suffer a bit of a hit.

I do not know all the details of the law yet, but basically you still get some sort of overseas carve out (the 80k), but that income that remains is taxed at higher rates than before.

"Consider a married U.S. citizen in Saudi Arabia with $150,000 in base pay, $30,000 in taxable foreign housing expenses (paid for by the employer), and $15,000 in interest income from a U.S. bank. Under the new law, that person's tax tab likely will jump by about $9,500 to around $22,500, according to PricewaterhouseCoopers analysts. In Hong Kong, the additional tax hit could exceed $20,000, it found."

[greentea]

I think the US government is short of money now!!

[sylvesterjay]

Sux to be an American. God bless the IRS eh

[Sleuth]

The WSJ said they were hitting the expats to fund other projects because this tax increase will bring in XXX billions and that will be spent elsewhere. Typical US Congress, Chuck Grassley slipped it in at the last moment so no one would notice. (Since they can't get anyone to live in his home state, he doesn't want anyone to live anywhere.)
The big issue is the housing allowances. The income expemption actually increase by a few thousand dollars.
Just need to wait for the US business lobbies to get into gear on this.