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| Working from Aust for US company | |
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| Topic Started: Feb 19 2008, 12:24:41 AM (1,077 Views) | |
| Angie | Feb 20 2008, 08:46:17 AM Post #21 |
True Blue Mate
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Damn... why didn't I think of that!!!! That's an awesome idea. |
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| TerritorianTori | Feb 20 2008, 11:30:52 AM Post #22 |
It couldn't happen here
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Yeah... hate to say, it sounds like these keep-your-job-back-home arrangements can be more trouble than they're worth. Particularly for those who are living in Oz permanently. :((
The article I posted said "9 months out of the taxable year"... my interpretation is that means it adds up over the entire tax year, and resets at the beginning of the next year.
At the end of the year, does your company send you a W-2 or a 1099 form? That will tell you whether they consider you an employee or an independent contractor. If you're being treated as a contractor and you feel you really should be an employee, you can force the IRS to investigate make a determination... read this for more info (specifically, Form SS-8 ). But yeah, if you're an employee, then the employer is required to make certain withholdings. If your taxes are withheld by the US and you pay US taxes, then... I believe you get a foreign tax credit in Australia. I think that's how it works. But consult a professional!
My guess is probably yes, because the Medicare levy goes by eligibility and income, not whether/how much you use it... and thank goodness for that, because our bills would be sky-high! :mrgreen:
I so agree! It's disgusting that these people can give you all kinds of wrong advice and when you get in trouble, it's YOU that has to pay, not them! :rant: Then again, I guess you get what you pay for... :(( |
 South Texas to the Northern Territory - since 2004 I'm a huge fan of... Angry Video Game Nerd | The Big Bang Theory | Doctor Who | Pet Shop Boys | Yanks Down Under ~ Americans living in Australia Avatar by Sketch Shop Boys I don't do Facebook, sorry. | |
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| TerritorianTori | Feb 20 2008, 11:36:37 AM Post #23 |
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It couldn't happen here
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ETA... nevermind, you were right.
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South Texas to the Northern Territory - since 2004 I'm a huge fan of... Angry Video Game Nerd | The Big Bang Theory | Doctor Who | Pet Shop Boys | Yanks Down Under ~ Americans living in Australia Avatar by Sketch Shop Boys I don't do Facebook, sorry. | |
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| dave2006 | Feb 20 2008, 09:02:09 PM Post #24 |
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True Blue Mate
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It can depend on several factors regarding your residency status. For example, people who are temporary residents (at least for some visa classes) and married to Aussie citizens still must pay the Medicare levy even though they are not even eligible to receive Medicare benefits. |
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| alect | Feb 21 2008, 02:52:02 AM Post #25 |
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True Blue Mate
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I understand how you feel and it aint fair but I was on a working visa (H1B) in the US for voer 3 years, and had to file taxes, pay taxes, but was not eligible for any of the benefits!!! Sucks big time. "Taxation without representation" I hear you say? |
| Los Angeles to Melbourne with my Yank wife (and dual daughter plus twins in the oven) | |
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| alect | Feb 21 2008, 03:00:56 AM Post #26 |
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True Blue Mate
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MTFers!!!! well I am definitely going to be putting up a fight. We are moving countries and not residing in CA. Yes we have a house that we are keeping and renting, and I am happy to pay whatever CA taxes on the income we make (which will be negligible after interest and property taxes and repairs), but damn me if I am going to pay CA 9.3% tax from my income just because I onced lived there. Other than an investment property we have no tie to CA. We may be in the state for a visit once a year or every two years, but that is clearly below the presence threshhold - in effect we'll be tourists. We will not be using any of the CA services, nor getting any other benefits from CA, so why should we pay them taxes? I had though when looking for a mail forwarding service of getting one in a state with no income tax - but alas the OR service was not to be. We are chaning our address on everything to our new CT address :D . And should it come to being employed by a US company I would ask that I be employed under their OH address or my new CT address. |
| Los Angeles to Melbourne with my Yank wife (and dual daughter plus twins in the oven) | |
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| dave2006 | Feb 21 2008, 07:15:58 AM Post #27 |
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True Blue Mate
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I dislike paying taxes as much as anyone, and am in a similar situation in Australia where I am not eligible to vote, etc. But if I said I was not "eligible for any of the benefits" that my tax dollars pay for I'd be mistaken. There are things that are paid for by tax dollars in both Australia and the US (eg, development and maintenance of infrastructure, social programs geared to reduce crime which hopefully reduces the risk that one will be a victim of crime, etc) that practically every resident benefits from at some level. Seems fair to me that if one is benefiting from these types of things which are ultimately funded by tax dollars, it is fair that one contributes. The actual amount someone in these types of situations should actually have to pay can be debated (which I won't do).. |
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| elsja | Feb 21 2008, 08:40:14 AM Post #28 |
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aussie pilot lover
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I agree, it is fair... if you are living there. Just because I once lived there doesn't mean I should have to continue to pay for law enforcement, public schools, etc. If I AM a resident, yes, I have no problem paying. But once I'm gone- why should I continue to pay? Now I understand I work for a US company and still have addresses there so there's no problem, I definitely don't mind paying taxes there (as long as I'm not double paying here), but I don't think you should continue to have to contribute to local governement once you move away. I was talking to a friend last night about this. (She is also an expat here working for a CA company). She said her friend is German born, lived in the US for a FEW YEARS (has citizenship because of a parent) but now lives in Australia. So only a few years of his life were even spent in the US. He STILL has to pay US taxes every year, just because he is a citizen. He actually wants to get rid of his citizenship for that reason. He's basically a german living in Australia- but still has to pay US tax. It's all a messed up system really. |
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Elsja's Bloggity Blog | |
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| elsja | Feb 21 2008, 08:55:19 AM Post #29 |
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aussie pilot lover
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First off- in regards to my last post... Dave... I realize now that you were talking about paying taxes to Australia even though you don't have some benefits here. I thought you meant paying the US even though we had moved. Your point makes a lot more sense to me and I do agree with you. It's frustrating but it's true and it's a valid point that we should pay some tax here. Now, one other thing I was going to say but forgot in my last post:
I agree here... but in my situation- no matter how challenging the taxes are, it will always be worth it for me. I work for my brother-in-law, so there are a few perks. He pays me very well... more than I could make here I'm sure and I also can go home whenever I want and not take vacation time for it. If I got a job here- it would be hard to go home whenever I wanted. With a job in CA, going home doesn't affect anything- I just work from there. Soooo I never have to take leave to go see my family and friends. That is a HUGE benefit to me So here's a list of my pros and cons (this might help those of you contemplating doing this): PROS 1. Waking up later and not dealing with traffic/busses to get to work. 2. Getting paid in US dollars (although this may not be a pro for long) 3. I can go home whenever I want and work from there 4. I can have the TV on while I work 5. I don't have to go to Aussie job interviews 6. You get off on US holidays 7. If I need to discuss something with my boss, I can do it over the phone or email- and that's less threatening to me than having to do it in person. 8. I only work until about 1-2pm 9. No annoying co-workers 10. I spend less money on work clothes (less meaning zero) CONS 1. Getting paid in US dollars is good, but it's not always easy to transfer it to an Aussie bank 2. Lack of human interactions/hard to meet friends 3. if you have to work ON california (or wherever) time- you could be in for some early mornings. Luckily I don't start until 8am, no matter what time it is in CA. 4. This sounds stupid- but it's easier to gain weight working from home because it's too easy to wander in the kitchen from time to time when I need a break. 5. This whole stressful tax issue 6. Don't necessarily get Aussie holidays off (unless your boss is cool) and also most people have to work Saturdays to be on the US schedule Hmm those are a few I could think of for now
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Elsja's Bloggity Blog | |
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| dave2006 | Feb 21 2008, 09:04:55 AM Post #30 |
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True Blue Mate
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Interesting. does this person have US source income? If not, it is difficult for me to understand how he has to pay US taxes every year if he lives in australia since I would think he would get a foreign tax credit on his US taxes which would wipe out any amount he owed even if his earned income exceeded the foreign earned income exclusion threshold since the tax rates are higher in Australia than in the US. I understand that he would have to file a US tax return every year being a US citizen. That whole can of worms has recently been debated in another thread. At any rate, he certainly is entitled to renounce his US citizenship; the US provides this right. |
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| dave2006 | Feb 21 2008, 09:11:54 AM Post #31 |
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True Blue Mate
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Yep, that's essentially what I meant. I'm certainly not saying I think the tax systems in both countries and the tax treaty they have are simple to figure out and fair to all; I've spent many a sleepless night thinking about them and wishing they were much simpler so a non-tax professional like myself didn't have to spend so much time, money, and effort trying to understand them. |
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| TerritorianTori | Feb 21 2008, 10:46:08 AM Post #32 |
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It couldn't happen here
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Actually, after reflecting upon my last post, I'm not sure that the US would have tax jurisdiction after all... going by the rules of foreign-earned income exclusion. Because it's based upon where you are earning the income, not where the money is coming from, once you qualify as an overseas resident (or are present outside the US for at least 330 days in any 12 period), you can exclude your foreign-earned income and get all those tax payments back. Of course, THEN you'd have to pay full taxes to Oz instead most likely at a higher rate. Think of it this way: you are (soon to be) resident in Oz and you're making money working as a contractor. Just happens that your clients are in the States. Of course, don't take my word for it, because I'm sure I'm probably missing some important detail... get professional advice!
I seriously doubt that he actually has to pay tax, unless he's making a huge amount of money. The double taxation avoidance treaty covers a lot of things. But yeah, he'd have to file every year... my kids will have to file too, even though they've never lived in the States. It sucks. :((
Oh yeah, I agree that the positives can outweigh the benefits for some people. Now, slight tangent... I'm curious to know more about the emotional aspects of telecommuting back home. Because I would think that if you're constantly living on US time, dealing with US people and US culture, you're not really "experiencing" the changes that come with such a huge international move. I dunno... true or false? Do you feel that your arrangement has actually hindered your adjustment process? Or helped? Or nothing? :cheers: |
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South Texas to the Northern Territory - since 2004 I'm a huge fan of... Angry Video Game Nerd | The Big Bang Theory | Doctor Who | Pet Shop Boys | Yanks Down Under ~ Americans living in Australia Avatar by Sketch Shop Boys I don't do Facebook, sorry. | |
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| Angie | Feb 21 2008, 11:08:34 AM Post #33 |
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True Blue Mate
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For me it has probably greatly hindered my adjustment process. Most here know about my homesickness, culture shock, and being on the ultimate verge of returning back to the US, so I wont really go over all that again. But I do feel the fact that I telecommute with a US company has not allowed me to cut that umbilical cord and enjoy all that Australia has to offer. I also work with my dad which just makes me miss him that much more. Or when work functions and office drama comes about I feel so left out of peoples lives now. Where I was a friend and confidante before... now I am just a computer. It makes me feel really left out and like I have no connection. This is probably why I have gone from working 40+ hours a week to 15 or so. So why don't I quit and get a job here in Australia? I LOVE my job. It is my passion, my life, and I would not be happy doing anything else. In California, the town I am from, my family name in the industry carries me a LONG way as I am 3rd generation in civil engineering, drafting, planning, and surveying. My name alone will get me jobs, meetings, and information that most cannot get. I did not go to college as I have grown up in this field and spent years watching my father and grandfather do it. So to get a similar job here in Australia would take years of university to learn Australian urban planning and development laws, along with the computer programs and measurement systems used here. It is not knowledge easily transfered to new countries as the laws are soooo different. (Ie: enviromental, zoning, surveying, land division, etc. are all different) I just feel I don't have the time in this life to return to school, not to mention I really can't afford it. Plus I would loose the sort of notoriety I get due to the family thing, and yeah that would be tough to deal with after so long. (Cheesy reason I know) And the wages for what I do there to the wages of a similar job here would be alot less. I just need to somehow find a middle ground. Which has including just getting a local "for fun" job so I can get out of the house and interact with people and the culture more. |
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| Angie | Feb 21 2008, 11:16:24 AM Post #34 |
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True Blue Mate
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Ohh.. just wanted to add!! It's suprisingly weird here too, having a job that telecommutes. It's like it's still such a new concept that no one takes it seriously. Like I am not seen as having a "real" job. I have had numerous friends offer me jobs here or ask why I am not out looking for work. I am constantly trying to explain I DO have a real job that pays quite well but because they can't see it they do believe it exsists. I get teased for watching day time tv (which I can't stand) and being a bum, when in fact I spend most of my day on the phone with clients or in meetings. |
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| Angie | Feb 21 2008, 11:31:28 AM Post #35 |
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True Blue Mate
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For those working from home in Sydney & Perth!! They have a monthly Jelly. Which is a group of telecommuters that get together for a day of work and comradere. I wish we had one here in Melbourne!! |
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| alect | Feb 22 2008, 12:14:21 AM Post #36 |
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True Blue Mate
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dave I totaly agree with you - in fact I am very much of the "taxes have their purposes" school and am surprised at how anti-tax most americans are and how they insist everything should be user-pays but don't understand how they take things for granted that are provided by taxes (as in your exampels). |
| Los Angeles to Melbourne with my Yank wife (and dual daughter plus twins in the oven) | |
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| alect | Feb 28 2008, 12:43:44 AM Post #37 |
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True Blue Mate
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So I have another more practical question. Given that USCs have to pay tax both in Austr and in the US, how do you do this given that the tax year in Aust is Jul-Jun and Jan-Dec in the US? The tax periods are not the same so how are the taxes paid and income reconciled between the ATO and IRS? (or at least in your returns) |
| Los Angeles to Melbourne with my Yank wife (and dual daughter plus twins in the oven) | |
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| TerritorianTori | Feb 28 2008, 09:30:35 AM Post #38 |
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It couldn't happen here
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Keep all of your payslips, earnings statements, records. At the end of the financial year, calculate how much you've been paid up to that point (and how much tax you've paid in), convert it to the other currency, and bob's your proverbial uncle. :mrgreen: |
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South Texas to the Northern Territory - since 2004 I'm a huge fan of... Angry Video Game Nerd | The Big Bang Theory | Doctor Who | Pet Shop Boys | Yanks Down Under ~ Americans living in Australia Avatar by Sketch Shop Boys I don't do Facebook, sorry. | |
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| nomadbb | Mar 1 2008, 05:41:33 PM Post #39 |
True Blue Mate
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Thanks for that list, Elsja. Even with my detailed nature, I never thought of the need to work Saturdays and have different holidays off! :eek: When we first started exploring moving back to Australia, the first thing I thought of, given my company's "work anywhere in the country" structure was "Why not just keep working for the US side, but live in Australia?" I mean, with the Internet, I could do my job anywhere that has decent broadband, and I already work from home. I even had a co-worker who went to visit his family in India for a month or so, set up a VOIP phone with a US number, worked offshift (prime shift US time), and there was hardly any impact to the team. Of course, that was short term. Where things get interesting is once you're there more than a few years. So I could get assigned to OZ and still be paid in US dollars, etc, but then I'd have to go back to the US, and that wouldn't fly with my wife. That leaves only the international transfer option for me, where I'd officially resign from the US company and be hired by the Australian one. They'd recognize my 16 years of service and in 9 more, I'd be eligible for 5 weeks of vacation. And I could keep my stock options. Of course, in 4 more years I'll be eligible for 5 weeks in the US. :rolleyes: Regarding taxation, which is becoming a real sore subject for me (and I'm sure for many on YDU), if you do choose to maintain any assets in the US, especially mutual funds, you could run afoul of the Australian FIF taxes. And even worse, any Australian mutual funds could get hit by the US equivalent PFIC (Passive Foreign Investment Company) taxes. The intent of these taxes is to prevent offshoring of investments, but as with most things, it sometimes affects legitimate investments in the home country. I'm still not sure what I'll do about investing in Australia. It sounds like I'll have to consult an accountant before I make any move. :arrgh: Brent |
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But I guess I should. It's SOOOOOOOO lame though that if I'm making NO money in this country- they'd still want me to pay or show tax returns. I'm basically a tourist for all intensive purposes- paying money into their economy. I'm not receiving any government benefits. YET. I can see how I would need to once I get medicare and all that. I just CAN'T imagine that they expect people on a working visa (some backpackers) to file a tax return. I should worry about it now, but I think I will when I become a temp. resident. | « Previous Topic · "How Do I...?" · Next Topic » |
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