The 20,000 dollar vacation April 16, 2008Posted by gordonwatts in physics life, Taxes.
Boy — you could do a lot on that kind of a vacation. You could have a nice house sitting out on the edge of an island… The penthouse for a night in downtown New York (I jest! I jest).
Well. I spent 20,000 on a vacation! Sadly, I just gave the money to Uncle Sam. Yep – Taxes! Isn’t that grand!?
The rules for working out of country are fairly complex. In general, however, our government takes a rather enlightened view towards working abroad: if you get paid out of country they are willing to give you a rather hefty tax break on that money. Which makes sense, really – if you are out of country you aren’t using as many of the services you would normally be if you were working in country. And besides, the more Americans working abroad, the better for our country’s image and also better because they will learn new things and bring them back!
However, while enlightened, they have some rather strict rules about what “out of country” means. And we violated them. If the rules had been for “out of seattle” instead of “out of the USA” then that cool $20,000 would have been sitting in my bank account! It was the Christmas trip back to the USA that did it. We were back in the USA for one full month. Some vacation and a bunch of work for both of us. What is really bad is that most of this is going to hit us on next year’s taxes. That combined with the weak dollar is going to make this year suck!
Actually, given the type of career that Paula and I have I don’t think we could work out of the country and also satisfy these rules – we have to travel back to the USA too frequently. Which is really unfortunate!