The Taxman Cometh!

Most of the blog relates to situations we encounter in China and to inform about what we are doing or have done. In addition to the normal banter of a madman, in this post I’ll also provide some information that perhaps isn’t known to everyone. I know that before I took this opportunity, I wasn’t aware of all of the nuances relating to living and working abroad. Everyone always thinks that this would be the chance to rake in the cash and return home, buy the Trump casino and tell the hairdo “You’re Fired!” I mean we read multiple books and none really ever broached the subject of taxes so I’ll now briefly (okay, maybe not briefly) cover that aspect of being an Expat.

For person’s living abroad, April 15th is not Tax Day; it’s really October 15th(or maybe even later). Interesting that tax day in the US comes in the same month as Tomb Sweeping in China (where you honor your ancestors, in the US our government honors them by taxing them when they die and leave you their stuff. There’s nothing better to remember your loved ones than a dusty old stuffed deer head and a tax bill. “It’s just what I wanted”.) Speaking of taxes, were you aware that working abroad means that you pay taxes in both your home country and the country in which you are working? I know, sounds counter-intuitive (but since when has the tax code ever made sense?) but that is the way it is. Not only do we have to pay taxes in two countries but everything here that is “covered” by the company counts as income. What does that mean? It means that any/all expenses reimbursed by the company (depends on your deal and/or company) is considered income for tax purposes. All of the “allowances” are considered taxable and count as income. Now perhaps I could’ve asked more questions and figured this out on my own but it didn’t really cross my mind as I looked at the contract and spoke with the tax accounting firm that would do my taxes. So, imagine my surprise when I received my amended W-2 form and found out that all of this was “income”. Gotta love it! (Yes We Can….take your money! Okay, it’s not specifically all his fault but the buck stops with the man at the top right?) I’m not complaining (well…I am but in an educational way). I’m just stating another of the observations about living abroad. Be sure to know your contract and be prepared for anything (and everything, watch all of the episodes of “Locked Up Abroad” and “Paradise Lost” to see what happens how and when things go really badly). Check with others that have gone before you (this isn’t Star Trek) to ensure there are no surprises. Never forget, just when you think you are out of the reach of the IRS, you find out the hard way that there is no such thing (unless the Fair Tax becomes law…..hint, hint). Some things you never want to know like “hypothetical taxes” and other genius bean-counter/lawyer terms to baffle you into silence (thank you sir, may I have another). If I look at my W2 and some of the new categories listed my eyes begin to cross and I feel faint. I just look at how much money went into the bank and keep my mouth shut. Seriously, I have hypothetical taxes taken from my check (hypothetically what happens when I smash my thumb with a hammer? There’s nothing hypothetical about it, it’s money but you don’t know what currency or how the heck they calculate it). To top it off, the W-2 is grossly over-estimated for wages and yet somehow it almost all works out to the same taxes as last year. It’s bizarre and so unnecessary.

If you think you’re out of reach of the new Healthcare bill by relocating to China (or somewhere else), think again. (yes that’s right….I’m going on a rant here so brace yourself) I still have to pay for a health plan and thanks to all of our hard working, communist manifesto believing stoolies we are stuck with another government black hole to absorb cash. Our costs were supposed to go down right? My health plan costs just increased by 12.5% (and that’s just for medical). It’s gone up every year for the past several years but this year, 12.5%....that’s insane people! You should look into your plan and see how this has helped you; my guess is that it hasn’t. The best part….this is just the down payment since we know the costs will continue to rise because the full implementation is still years away. What a shock the politicians are exempt from this new and improved system.

The best part about the rising costs is that at the end of the year you may have earned and been granted a salary increase (note that I said earned and not “lucky enough to get”, it’s not about luck), but in the end you are still losing money; it’s just a matter of how much less you will have with your new & improved health plan costs continuing to rise at levels that you can’t match. It’s a sad story on the demise of the American Dream. We’ve gone from being the Land of the Free and the Home of the Brave to the Land of the Free-Loaders and Home of the Brave-Nothing-On-Your-Own. It’s shocking how stupid people are, they say “government money” and forget that isn’t money the government earns; it is money they take from you and your family. In theory (or to keep with the theme, hypothetically) Robin Hood sounds like a very noble person, robbing from the rich and giving to the poor but in fact, Robin Hood is a thief and an enabler. He’s no different than a crack dealer (think about it). In today’s world many see the government/politicians as Robin Hood. Love me for I am the people’s champion! I will stand up for the little person against the evil _______ {insert your own evil enterprise here}. In actuality, they are not very noble or honorable people (I am sure there are a few but a few cannot stand up to the mass of the old timers who may have started on the right path but were quickly diverted, “I am your father….feel the power of the Dark Side”).

Sorry, I digressed from some tax information for living abroad and started my rant. You should feel a little lucky that this is actually the much-edited version. My original press release was probably a lot more nasty (but I wasn’t using my teleprompter). I guess I’m getting a little feisty as we prepare to perhaps head back to the land of “Yes We Can”.