US Citizen living in HK needs tax advice

what does FICA stands for?

Dear jwm:


We are a tax consulting firm specialized in U.S. taxation of foreign income and international transactions.


We are sorry to advise that your understanding of the social security tax requirement is not quite correct. If a U.S. taxpayer overseas remains on his employer's U.S. payroll, social security taxes will continue to be withheld from compensation, including the expatriate allowances and reimbursements that are included in taxable wages. If you are on a foreign payroll, you generally cannot continue to pay into the U.S. social system.


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Brian Wong, US CPA

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Southwest Tax & Financial Planning Limited

8/F., New York House

60 Connaught Road Central

Hong Kong


Tel: (852) 2575 5800

Fax: (852) 2523 6800

Email: swtfp@netvigator.com

Website: www.yp.com.hk/swtfp

Brian, saw your reply, I've been in HK since 88 never made more than 80K and was cut loose from FICA upon issuance of HK working Visa.


Have not filed since 88, have collected all FICA due under scheme that had been paid.


Changed jobs, now work for UK based company. Make more than 80K a year. Will need to file this year. Have all HK returns back to 88.


Any suggestions.


On a side note, trying to get adopted kids US permanent residency. Form requires that I submit last 3 years of tax returns. At this juncture I'm jsut going to submit HK returns. Any comments.

Dear jwm:


We wonder how you paid U.S. social security taxes when you were employed by a local entity (non-U.S. entity)? That is, what form did you use?


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Brian Wong, US CPA

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Southwest Tax & Financial Planning Limited

8/F., New York House

60 Connaught Road Central

Hong Kong


Tel: (852) 2575 5800

Fax: (852) 2523 6800

Email: swtfp@netvigator.com

Website: www.yp.com.hk/swtfp

Dear Arlina:


You must file all delinquent tax returns as the statue of limitations does not apply to delinquent tax returns. In other words, the IRS has the legal right to go after you anytime. This is per the Internal Revenue Code.


Having said that above, the IRS practice is to chase tax returns for the last 6 years. However, this is not per the Internal Revenue Code and is simply the IRS practice.


Finally, please be advised that Hong Kong tax returns are not acceptable documents to prove your financial status to sponsor any permanent residency application.


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Brian Wong, US CPA

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Southwest Tax & Financial Planning Limited

8/F., New York House

60 Connaught Road Central

Hong Kong


Tel: (852) 2575 5800

Fax: (852) 2523 6800

Email: swtfp@netvigator.com

Website: www.yp.com.hk/swtfp

I am a U.S. citizen who studies and works part-time here in Hong Kong. I know my yearly salary is not even close to the $80K, but I have only been here for 8 months which means I don't think I fall uner the foreign income exclusion. I assume I still have to file my taxes?

In addition to everything said above, and most Americans do know this, there is an obligation to report all interest earned on any bank accounts, or any income whatsoever no matter where it is received or derived unless the tax law specifically excludes it. So don't think just because a person makes less than $80K (and that figure has changed too, I believe) you don't have to file any tax report if you are also getting any bank interest. As for local (or local branches of foreign) banks not reporting to the USA, HAH!! You do not get a Form 1099 from local banks, but I have no doubt they would turn over the records of their customers' nationalities if ordered to do so.


Plus, Americans are forbidden by the major HK banks to do online share trading in the Hang Seng exchange; also forbidden to apply for IPOs; also forbidden to buy many if not all of the financial products/funds, except for time deposits, offered by the banks or investment advisors. Krazykenny is right: you have to file. If you're lucky, you just may not have to pay unless your income triggers the threshhold. One more thing: I had read, though never been faced with the situation, that the US Government checks whether or not you have filed tax returns when it is time to renew your passport. On that, I'm not 100% sure.