[animalmom]

If you are a US Citizen and not hypotaxed do you pay more or less taxes than if you are hypotaxed.

For this exercise assume you are hypotaxed as if you were living in and make high six figures USD/ annum.

regards,

AM

[applefan]

If you are making high six-figures USD, you should be paying more taxes if you are not hypotaxed. I did a breakeven calculation once when I was planning on moving and I vaguely recall the back-of-the envelope exercise I did showed that one should be indifferent if one was making somewhere between 300-400k. Or maybe it was 200-300k. Somewhere around there. But if you income is more than 500k, I'm pretty certain you'd be better off being hypotaxed. Then again, I didn't take into consideration investment income and any other income outside of employment income.

[Zion]

Hey,
Just want to share some infomation with you. what you can do is start a fund that can help you reduce your tax burden. I'm a US citizen too, but if you start a fund on your investment account you do not have to pay tax.. all you need to do is report to department of revenue and tax. That's one alternative you can look at... but 6 figure amount. you know Uncle Sam want some of the pie.

[animalmom]

Applefan that is what I supsected, thanks very much - as many of yu know Banking firms will sometimes try to sell you going to asia as local staff with housing allowance and getting paid more on the back end rather than going as an expat.

I don't think it will happen to me - but I want to be armed with all the reasons I want to go as an expat.

[freeier]

hmmm.. this is a weird concept to me.
hypo taxed means your HR working out a package for you based on the hypothetical tax. it does not mean if you don't do a hypothetical tax scenario u can avoid some tax. so end of the day u still pay the same amount of tax regardless.. only reason being that if yr hr hypoed your tax they might pay you more to cover those liabilities.

correct me if that's wrong.
u dun really have a choice right ?

[animalmom]

No, if you are hypotaxed they figure out what you would make if you live in your home locale, then your company pays the difference based on what you actually owe based in the foreign country.

Essentially that's the same thing but the bottom line is the hypotaxed number is never the same as what you would pay if you are local staff and there is a break even typically where one is more advantageous then the other.

It turns out I'm better off so I want to be hypotaxed.