Sunday, March 17, 2013

Death and Taxes

Man, I think I'm actually going to have to pay some TAXES this year.


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...


Tim said...

Does that signal the death knell of your relationship?

Jug Jugette said...

Just had a root canal and crown done in Shanghai - 700 RMB, or less than $120. Perfect for noodles but not much good for crunching those bones.

English Teacher X said...

I'll update about the relationship soon.

brian said...

Back to the Sandbox? Well, it will be interesting to read your take as everything really falls apart Stateside. As far as taxes go, remember: you could have opened an account in Cyprus when you were there. As far as dental work is concerned, you may want to check out companies like Delta Dental, which cost me $130 for a year. It isn't insurance, but gives you a fixed price for services much lower then without. Don't know if it's available in AR or if your friend accepts it, but it's worth investigating; your x-rays and a yearly cleaning are included in the purchase price.

English Teacher X said...

Ha, are you referring to the 10 percent tax they're trying to levy on the unofortunate citizens and Russian tax dodgers there? The vagaries of international banking are scary everywhere.

Mike Y said...

Is there anything you bought in 2012 that you can write off? A new laptop, for example? Or anything else potentially business related? Then you could maybe deduct that...

I actually had excellent dental care in Lithuania--better than in many US dentists I'd been to. And cheap. But yeah, kinda luck of the draw there...

Anonymous said...

So, I got $5000 of dental work done for a little over $500 when I flew back from teaching in the ROK. This is the (popular) strategy: get the work done in Tijuana (your dentists will dress like cartel because they make so much money from Americans, but they actually know what they are doing - I had a good experience - and the hot dental assistant dressed like a tart). Fly into San Diego and stay at one of the motels/hotels near the border that caters to medical tourists to Mexico. In the morning, a private group van will take you from the hotel to the dentist office, and will pick you up and take you back again when you're done. I believe that it's free as part of your hotel stay. I recovered for an extra day in the comfortable, safe USA hotel and flew out again after the weekend. This way, you get the financial benefit of international dentistry but are only out of the USA for the actual work. IF I remembered the hotel/dentist specifics I would share, but it's been six years. It should be easily findable via search engine.