2003-09-23, 08:07 PM
I am new to living outside the US,I thought I would be rid of the whole "you make we take deal" but I guess "uncle sam's" hands are pretty long.
anyway can someone explain the whole process involved in paying tax if you are a US citizen living in japan?
2003-09-23, 10:17 PM
You pay Japanese taxes.
You pay US taxes as normal. That is, whatever you made in the States is taxable (interest income, stock dividends, etc.). The money you make in Japan is taxable, too, but you are exempt from any US taxes on it up to about US$79,000 or whatever the number is nowadays. Considering the average eikaiwa teacher makes US$24,000 per year, you are in no danger of getting taxed on it, BUT YOU MUST FILE.
Just use the 2555 form with your 1040. All info is online.
Since you don't get pay stubs here, just enclose a letter with your IRS forms to detail your monthly earnings, then total it. You can either itemize the monthly exchange rates, or use the yearly average (available from the US embassy).