Need help with U.S. tax - urgent!!

I am a U.S. citizen working abroad in Shanghai. I have been here for 2 full years; however, this is the first year I have to file my U.S. tax return on my own (I am working for a U.S. company but my head count is now local so I don’t get to enjoy the benefit of company doing my taxes)


Thus, I am looking for a specialist who can help me deal with the hassle of U.S. tax return.


Any advise?

sorry, but you are going to have to pay a local accounting company to do on your behalf. Contact American Consulate and they can give you a list of accounting companies. However, as a non resident american you, can apply for an extension until Sept 15th, 2006. on both your state and federal taxes. good luck

We are pleased to advise that we are a tax consulting firm specialized in providing U.S. expatriate tax return services and planning advice.


= = = = = = = = = = =

Brian Wong, US CPA

= = = = = = = = = = =

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

Unless you have substantial other investments or income streams it should be a simple US return and you shouldn't overpay for the services. By simple I mean if you have lived overseas for the entire year (and therefor your income doesn't have to be proportioned) and either you earned under US$80,000 (amount of foreign income fully excluded for US tax purposes) or you properly paid the high marginal tax rates in China (and therefor have tax credits available to apply against income above US$80,000).


Also note that tax credits not used up because you are working in a high-tax (higher than US marginal rates) location like China or Australia may be applied against future or past tax liabilities on foreign earned income. So if you move to Hong Kong later after working in China, you can apply previous years' tax credits. Better yet, if you move to China AFTER working in Hong Kong you might be able to amend your old return and claim a refund for the year before you moved to China.


For more information contact us at: Info@OverseasLaw.com

Do I have to include documentation (payment of taxes to the HK IRD) with my tax return in order to claim a tax credit?

You do not have to submit actual evidence that you paid foreign taxes when you file a US return. You must complete IRS Form 1116 to compute the amount of the credit and then include the completed form with your US return, which of course must be signed under penalty of perjury. However, you should maintain evidence that you did actually pay foreign taxes for a minimum of three years after filing in case you are ever audited. During an audit you have a positive responsibility to prove the accuracy of your return, i.e. at this point you would need to produce the evidence that you paid.


Note that you will only bother to file form 1116 and claim a tax credit if you earned foreign income more than US$80,000 Most US Taxpayers living abroad will be claiming this exclusion and it is achieved by completing form 2555. It is important to realize that you cannot claim tax credits for tax paid on income that is excluded. This is why US returns become more complex after the $80,000 mark.


By the way TS, living in Hong Kong you may also be eligeable for a US exclusion for "excessive" (compared to the US) housing expenses. For 2005, whatever you spend over US$12,191 can also be excluded from your foreign earned income. This an important item for US taxpayers living in Hong Kong, because most spend a great deal more than the threshhold in a given year. The Housing Exclusion is also claimed by completing form 2555.


I hope that helps. For more information, you can contact us at: Info@OverseasLaw.com