When you live and work in Shanghai as an American citizen you should be updated with tax laws that apply in situations like this. This is the case where you should resort to the services of an international tax law specialist. They are the ones who should know all the legislation regarding this aspect in the life of every expatriate.
Living in USA you know what taxes you are about to pay every year, but living and working in Shanghai is a different situation. You still have to file your taxes given the fact that you earn an income and this can be done by someone who is in the States, preferably a tax law specialist.
Your status as an expatriate makes you eligible for some exemptions and for this fact, an international tax law specialist can be of a great help. All those Americans living and working in China for most part of the year should take care of filing their taxes, and at this point the specialist can step in and file only for those taxes that you need to pay. In case you are married and you need to file a joint tax for with your spouse, you must know that your spouse’s income is also exempt from taxes.
The only income that is not exempt from taxes is the one obtained from interest, property rental and dividends. The income you and your spouse earn from working abroad is exempt from tax paying according to US tax law for expatriates. It is however your responsibility to file for tax return every year and with the assistance of an international tax law specialist you can take this burden off your shoulders.
It is very important to know and understand what your exemptions are and in case you get confused on this aspect it is always recommended to consult and ask the support of this specialist. There are situations when you have paid abroad certain taxes while living and working there and as such you can claim to be exempted from those taxes when you file for you tax return back home in USA. However it is indicated to know which these situations are before you file for taxes as not all these cases apply for exemptions.
Our partners provide U.S. tax preparation services for non-resident Americans (expats) and Greencard holders, who must continue to file annual US tax returns, even if they are living and working abroad long term.
We are based in Shanghai, China with affiliate offices in Hong Kong and Tokyo. We specialize in providing China and Asia based U.S. Expatriates with professional tax return preparation and consulting services.
Our tax professionals are experienced American CPAs and Enrolled Agents, who have worked professionally in both the U.S. and Asia, with a focus on expatriates living in Hong Kong, mainland China, and all other areas of Asia.