aleigh2715[at]excite.com wrote:

- quote -

If you meet the requirements (and it sounds like you
probably will) you would qualify for the foreign earned
income exclusion. You would report your gross salary
(before Chinese taxes) and then take the exclusion. If you
cannot exclude all of your Chinese income, you could claim a
credit for the Chinese taxes paid on that portion of your
income that is not excluded.

The rules relating to foreign income can appear to be
relatively simple but actually applying them to a real
situation is not always easy. Particularly in the first
year or two, the computations can be quite complex. It is
not usually a "do-it-yourself" project.

I strongly recommend that you consult a professional who is
experienced in expat tax matters.

Lanny K. Williams, CPA
Nawarat, Williams & Co., Ltd.
Income Tax Services for Expatriate Americans

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I am a US citizen considering an employment offer to work in
China for a foreign (Dutch) company. I would receive 100% of
my salary in chinese

RMB currency, no salary would be paid in USD. I expect to
pay about 30% in various taxes to the Chinese govt.

Can anybody give me some insight about how does the US
determine my tax liability for my income? Do I get "double
taxed" on the same income, or does the IRS have some formula
such as I would normally owe 35% tax on so since I already
have paid 30% to China, then I only need to pay the
difference of 5% to the US?

Also I am aware of the Foreign Earned Income Exclusion for
people who maintain a physical presence outside of the US.
This will apply to me, and actually I expect to be able to
declare my tax home (bona fide residence) to be in China. So
when we look at the threshold of the first 80k of income
being excludable, is this from my pre-tax income or income
received after paying chinese taxes?

Any replies (or suggestions for further reading) will be
appreciated.

- Raleigh

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >