rencontres esperance Petroleum Engineer has been touted as one of the most lucrative professions of today. With a cool six-figure salary, many have joined what is called a “black gold rush” starting in early 2000’s. Among the hopefuls, a good number of engineers realized the high demand for skilled workers to extract the wealth of oil and gas in other parts of the world and took their talents overseas where they were often offered even bigger salaries. An average of $58,818 bonus definitely did not hurt either, and skilled American engineers flocked to the Middle East seeking this personal fortune.
http://www.polykani.cz/?indianapolis=questions-to-ask-a-girl-while-dating&249=1f While big paychecks may have guaranteed a comfortable lifestyle to these engineers, it came with a certain set of setbacks as well. The high income is scrutinized by the higher tax rate, and combining that with an expat status can quickly amount to be a total headache. But as usual, with enough preparation, there is nothing to fear.
Qatar, Saudi Arabia, and Kuwait are among the international oil production heavyweights and also the most active recruiters of American petroleum engineers. To understand exactly what the tax requirements are for American expats, we must first understand the tax situation of their current resident countries. Here is a quick summary of each country’s tax policy.
- No taxes on employee earnings or employer-provided benefits on either local or expatriate employees
- No estate or gift taxes
- No social security taxes
- Allowable deductions for interest payments, salaries, rentals, depreciation, and etc
source Saudi Arabia
- No tax payable on salaries for foreign employees
- Tax on overseas-earned income for self-employed foreigners
- No zakat or religious wealth tax for foreigners
- Tax deduction on most business expenses
go here Kuwait
- No personal income tax, employment tax, and wealth tax
- 7% social security tax
tastyli\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ As mentioned in other posts, U.S. expats bear the tax reporting requirement regardless of their income source or their current residence. With a number of preferential tax benefits, including the Foreign Earned Income Exclusion, offered to expats, the amount of taxes one must pay to the IRS could totally be reduced to zero.
see url Keeping all that information in mind, let’s take a look at an example —-
Kevin is an engineer working for Qatar Petroleum. As an expat, Kevin will have to file his U.S. tax return for all the years he has lived in Qatar. Kevin fears that he’d pay taxes in both Qatar and the U.S.; however, Kevin satisfies a certain set of requirements and qualifies to receive the benefits of the Foreign Earned Income Exclusion, which would reduce his U.S. taxable income by $100,800. He makes $120,800 a year, meaning even after the Foreign Earned Income Exclusion kicks in, he will have to pay taxes for the remaining $20,000 to the IRS. Worry not, Kevin may qualify for foreign housing exclusion which would exclude or deduct a portion of his foreign housing amounts. Kevin can also use the foreign tax credit paid or accrued to further lower the chance of paying taxes to the U.S. government. He will still have to report all these as a part of his tax return, but he may not owe a penny to the IRS. After all, he may keep the majority of his hard earned money if he understands and prepares carefully.
Are you curious whether or not you qualify for expat deductions that could potentially lower your taxable income? Get in touch with one of our CPAs today and find out how you can save money!