13 replies to this topic

[ArtVandelay]

I'd like to teach in Thailand (been there twice, really like it) but am still unclear on how the tax situation works.  

1) Do the Thai schools take out taxes from farang teachers paychecks?   and

2) What happens when I return home (to US in my case)..?  Do I need to tell my embassy I am teaching abroad before I leave?   What happens if I wait until I get back?    Will I have trouble getting back in my country (with a wp in my passport)?  Any advice is appreciated.    Thanks in advance.

Art

[lanny]

ArtVandelay, on 2008-09-25 03:01:38, said:

I'd like to teach in Thailand (been there twice, really like it) but am still unclear on how the tax situation works.  

1) Do the Thai schools take out taxes from farang teachers paychecks?   and

2) What happens when I return home (to US in my case)..?  Do I need to tell my embassy I am teaching abroad before I leave?   What happens if I wait until I get back?    Will I have trouble getting back in my country (with a wp in my passport)?  Any advice is appreciated.    Thanks in advance.

Art

You may qualify for an exemption from Thai taxes for the first two years of teaching in Thailand.  Your school should be able to help you with the necessary paperwork.

Even though you will be working in Thailand, you still need to file a US tax return.  You may be able to claim an exclusion here, too, but you need to file a return to claim it.  Otherwise, the rules for paying US taxes are no different than for someone living in the states.

[Ijustwannateach]

Yup- after a couple of years of constantly living abroad, you can acquire a new tax status which gives you an extra exemption (up to about USD70,000), but you have to file for it- and even if you owe no taxes you are supposed to file, otherwise I suppose you are subject to some kind of bureaucratic penalties for not filing (but that's better than a penalty for not *paying*).

"S"

[PeaceBlondie]

A little bit more on the details

You do not need to tell the embassy.  As a US citizen, you are subject to income tax assessments by the IRS, world-wide.  If you file for it, you receive a foreign earned income exclusion, on more than $70,000 USD every year.  In my case, I qualified immediately, under the residence test, rather than the physical presence test.  If you teach in a Thai govt. school, you are also exempt for the first two years (but yuu need to claim the exclusion to get it).

You are also subject to Thai income tax.

[lanny]

PeaceBlondie, on 2008-09-25 05:32:17, said:

A little bit more on the details

You do not need to tell the embassy.  As a US citizen, you are subject to income tax assessments by the IRS, world-wide.  If you file for it, you receive a foreign earned income exclusion, on more than $70,000 USD every year.  In my case, I qualified immediately, under the residence test, rather than the physical presence test.  If you teach in a Thai govt. school, you are also exempt for the first two years (but yuu need to claim the exclusion to get it).
.
You are also subject to Thai income tax.

Peace Blondie

The exemption for teachers is from Thai taxes.  You do not need to teach in a government school; all teachers qualify.  Your school should be able to help with the paperwork.  File and the school doesn't need to withhold taxes.

[TerryLH]

"Yup- after a couple of years of constantly living abroad, you can acquire a new tax status which gives you an extra exemption..."

Do you really believe it takes a couple of years to quaiify for the exemption?

[WilliamJarvis]

lanny, on 2008-09-25 15:28:29, said:

PeaceBlondie, on 2008-09-25 05:32:17, said:

A little bit more on the details

You do not need to tell the embassy.  As a US citizen, you are subject to income tax assessments by the IRS, world-wide.  If you file for it, you receive a foreign earned income exclusion, on more than $70,000 USD every year.  In my case, I qualified immediately, under the residence test, rather than the physical presence test.  If you teach in a Thai govt. school, you are also exempt for the first two years (but yuu need to claim the exclusion to get it).
.
You are also subject to Thai income tax.

Peace Blondie

The exemption for teachers is from Thai taxes.  You do not need to teach in a government school; all teachers qualify.  Your school should be able to help with the paperwork.  File and the school doesn't need to withhold taxes.

As far as I was aware, this applied in the case of UK teachers under the Double Tax Treaty between Thailand and the UK. I was not aware it also applied in the case of the USA.

PB - Is that right?

Edited by WilliamJarvis, 2008-09-27 11:42:04.

[PeaceBlondie]

I defer to Lanny.  I used the Thai-US treaty as well as the Earned Income Exclusion, and did not know I was exempt from Thai income tax as well.  Mai bpen rai - in my case, the first Thai incompetent govt. school withheld Thai taxes even though I had no Thai tax ID number.  I bet the Director's staff had a PeaceBlondie som tam party after I left, using my withholdings.

[ArtVandelay]

Thanks for all the advice.   Best site on the internet for Thai teaching info.

[PeaceBlondie]

ArtVandelay, on 2008-09-29 08:38:42, said:

Thanks for all the advice.   Best site on the internet for Thai teaching info.

QUOTE OF THE DAY

[dr_Pat_Pong]

self praise and all that PB    

[paulfr]

If you are a US citizen, you can claim an $80,000 exemption on foreign income when you file your return.
Since pay is so low here [25-75Kbaht ~ $800 - 2500 /month] you will likely owe no US tax
unless you have other income like pensions or a stock portfolio.
I do not think you have to apply if you pass one of the residency or physical presence tests.

Be warned that teaching here is challenging because you are working for Thais and they
treat employees poorly; all employees Thai and farang. It is Asian culture.

Try it for a year and see. You may have the personality to adjust well. But not all do.

Good luck

Edited by paulfr, 2008-10-02 19:02:19.

[lanny]

[quote name='paulfr' date='2008-10-02 13:01:42' post='2250843']
If you are a US citizen, you can claim an $80,000 exemption on foreign income when you file your return.
Since pay is so low here [25-75Kbaht ~ $800 - 2500 /month] you will likely owe no US tax
unless you have other income like pensions or a stock portfolio.
I do not think you have to apply if you pass one of the residency or physical presence tests.

Not true!  You are entitled to $82,400 (in 2007) exclusion for earned income but you must file a tax return to claim this.  If you don't and IRS contacts you about your return, you may be denied the election to exclude this income.  And remember, the statue of limitations for IRS to come after you doesn't start running until you do file!

[PeaceBlondie]

Thanks again to lanny.  I overlooked that mistake.  You must file and request the exemption.