Sunday, March 17, 2013
Death and Taxes
Some of you probably wonder about the tax situation of English teachers; although I'm sure many more of you wonder about the poontang situation of English teachers, let me address the first topic, as the second topic has been well covered.
I talked about this a bit in HOW TO SURVIVE LIVING ABROAD. People ask me about it a lot in America though, assuming that I have to bank my money in the Cayman Islands or whatever.
No, I have to explain, the money is clean. It's like this:
Currently, there's a $92,000 exclusion on income earned from a foreign employer. So since I worked for a foreign entity, and was in another country for a significant part of the tax year, I can take a tax deduction for up to $92,000 of the money I earned.
Now of course I didn't earn anywhere THAT much in a year. I was making a bit over $4000 a month in the Sandbox, though, plus some various bonuses, and I don't have to pay taxes on any of that.
(Before 2009, I don't think I ever earned $20,000 a year, and for a number of years, no more than $12,000. But I did get to keep it all, at least.)
I've paid about $12,000 total into social security in my life, from a couple of college jobs and a year of English teaching employment in New York; most people seem to agree that's no big loss, as everybody expects it to go belly-up soon.
Now of course a lot of English teachers don't bother to file tax returns - this is one of the big things that comes back to bite you on the ass in the event of ever trying to get a real job. (Not that I've ever really tried, but I'll soon share some stories of Crazy Bob's attempt to get a real job working for the government. No tax history? Foreign wife? No government job.)
Just FYI, the form you need to file the income exclusion is the 2555. The 2555 EZ will suffice for most English teachers, and then you'll be in good standing with Uncle.
However, I made enough money from E-books and investment gains and dividends in 2012, that I'm actually going to have to pay the US government some money. I've been sitting here wrestling with Turbo Tax for most of the day, trying to find some more deductions, but the red number $542 still remains stubbornly fixed to the top of the screen.
E-book income is taxed like a royalty, incidentally; you get form 1099 misc from Amazon and the other retailers. It's not earned income, so I can't deduct it by (for example) opening an IRA.
The American tax code is so laughable. Does any other country force its residents to sit down and do a math workbook every year?
Any accountants reading, feel free to offer me some advice.
And then the other awful American expense -- health care. I need a root canal and a crown, which in America will cost about $2000 total. (The best endodontist in town happens to be a guy I went to high school with, and he cut me a 20 percent discount, but the price of the crown remains stubbornly high.)
I suppose I could fly to Russia or Costa Rica and get the work done for less than half that, with the various risks that might entail. Haven't decided yet. I mean, of course, you can sue the dentist if they fuck up over here, but the cost of that lawsuit is kind of built into the price you pay.
Anyway, soon -- back to the world of English teaching. I'm pretty sick of fucking around with e-books, I must say. Little teaser on the subject -- I have a job interview for another position in the Middle East soon. And that motherfucker pays such a high salary, I might be paying even more taxes in the future...