my company offer me Tax Equalization, is it better to have it or not to have it.
I heard that HK have a lower tax, but in the US, I have deduction, As I own a home, plus I am a single mom file for head of household with a child.
For Tax Equalization, am I just being tax for my salary? How about the all other income from COLA, School and Relocation expense and such?
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HK has a relatively low tax rate but if you are an American citizen or permanent resident, you must pay US tax anyway, minus what you pay in HK.
Every company does this a bit differently, and the rules tend to be very complex when they involve the US. Do you have any colleagues already here whom you can ask?
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I don't have colleagues, so, that's what I'm trying to figure, if someone at Asiaexpat had done this.
Would it be better that I opt out of the Tax Equalization and pay my own HK tax and US tax after the exemption.
Or the Tax Equalization give me more tax benefit? with Tax Equalization, I would be responsible for just my base salary tax? which is 96K? COLA and other expense (about 40K) would not be included as in income.. base on Tax Equalization? what about Social Security? If I were to be treated as I were living in the US, I would be responsible for Federal, State, and Social Security
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We have done this stuff. After two years of that mess we still didn't understand exactly how it works. It has been an arcane mess.
I would advise you to sit down with payroll and plug in the actual numbers.
AFAIK you are not responsible for state taxes while out of state.
Sorry I can't be more helpful.
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