Friday, February 29, 2008

Death and taxes

Well, taxes at any rate...

I was quite nervous about taxes for 2007 as this is a partial year in Kuwait for us. Well, we just got our taxes done by ExpatCPA and I've mailed them off. So let me give you the breakdown:

First, they filed an exemption request form to extend our *filing* date for 2007 to Dec 2008. This is to make sure we can meet the Bona Fide resident test for the overseas income exclusion for money earned overseas. Interesting thing is, along with this goes the check for our 2007 Federal taxes...because although we can extend the *filing* deadline, you cannot extend the deadline to *pay* taxes. So we *had* to pay taxes before April 15, but we actually *file* in December 2008. Of course, they handle all the timing of this too.

The 1040 was filled out with the stateside work information, and there was an additional foreign income exclusion form with lots of worksheets that made me very glad I didn't have to do it myself.

They also did our state taxes (Oregon), and it is good to know that Oregon will abide by the federal extension and exclusions.

ExpatCPA has been *mostly* good so far, with some exceptions. The number one thing I appreciate about them is that they have been willing to work with my prickly nature, even if they have made some misteps along the way. First, I selected them because they use a 3rd party secure (SSL) website for entering all the needed information. Once done, they download the info and fill out the tax forms. Unfortunately, at one point I had forgotten my password, so I emailed them requesting an account unlock. They then sent me an email telling me my account had been unlocked, as well as my password in plain text. I had used one of my financial tier passwords and this necessitate that I reset all of my financial website passwords. The person who did this accepted my criticism with appropriate contrition and said he wouldn't do that again. Later, when I needed to send scans of my W-2s, they were kind enough to work with me and utilize FilesAnywhere.com to securely transfer the files. All was great, until they sent me the final pdfs...which they emailed to me! Apparently, they don't see the problem with transmitting documents containing private information such as social security numbers and financial information via an insecure medium such as email. Again, they responded well to my issues and worked with me to change the method for sending the updated docs back to me. They charged about $650 total for the Federal and State ($100 or so for state), which is a pretty good median price. I've seen everything from $30 to $1000, so $650 for peace of mind isn't so bad.

In the process, I asked them if because I had to pay some taxes for last year, didn't I have to pay estimated quarterly taxes for 2008? They said, uh...yeah...and made me out some nice coupons. I spent some time figuring out if I could withhold money from my paycheck in lieu of paying quarterly, but eventually just decided to withhold the money myself and pay the estimated taxes. There will be plenty left over in the taxes fund for anything else that I owe at the end of 2008.

So all in all, feeling pretty good about it now, which is great cuz I was quite worried about it before.

5 comments:

Anonymous said...

Hello again JC and Kerri,

Thanks for all the good information. Your blog is the best place on the internet I have found that really gives an accurate description of life there in Kuwait.

If you have a chance, can you let me know about these questions I have about working in Kuwait?

1. When you land at Kuwait International, are there any problems with bringing in prescription medication when you clear customs?

2. Although I will be working with a different company, do you get both US and Kuwait national holidays off? How long is the average work day for an American there?

3. When you use an ATM machine there with a VISA debit card from the states, do they work ok? Do they charge high fees when using a stateside VISA debit card at an ATM there? Are ATMs easy to find?


4. How well stocked is the post exchange (PX) where you are at? Are you allowed to shop there as a civilian? I am retired military is why I am asking. It's always nice to be able to be near a good PX.

5. Do any of the civilian clinics there accept medical insurance at all from the states? Is it all pay as you go and hope to be reimbursed later?


7. Did you get your International Driver's License in the states before you left? Is it really needed to get a driver's license there?

Thanks!

All the best,

Jeff

JC said...

1) No issues I am aware of. Several people at CRC brought several months worth of prescription meds. Course, we flew in to the airport on a chartered military flight, so we didn't exactly go through customs.

2) We only get US gov holidays (more than I'm used to in the private sector). Our workday is 12 hours long, which is pretty typical for US contractors. We work 5 days a week...some work 4, and others work 7. It just depends.

3) You can use a debit card no problem here at ATM machines. Depending on your bank, you may get dinged quite a bit (Wellsfargo is my bank and I get charged around $5 to withdraw money, so I try to make it count). For large sums of money, a wire is the best way to go, but you need to have someone authorized on your account to go to a branch office and request the transfer. Kerri was able to do that several times to transfer money over to a friend's account which he then withdrew and gave to me. ATMs are plentiful.

4) I have nothing to compare it to really, but it seems the PX is stocked quite well, though we don't really use it much. Things like cameras or an ipod are examples of things we've bought there. We find the price online and if it's cheaper they will honor it locally. The groceries are somewhat lacking (especially in the fresh arena), but they do have a good selection of frozen meats. It's also the only place in Kuwait to get pork products (not that we miss it).

5) My company provides international insurance via Aetna Global. There are 4 clinics/hospitals here that accept direct pay with Aetna, so yes, if your insurance company has it, you can find direct pay options. We can also be reimbursed for going to *any* provider, but we have to submit the reimbursement request to get it.

6) A valid US drivers license is sufficient to get a Kuwaiti license. Your company should take care of all that for you. I got my drivers license a little before getting my civil ID. My wife doesn't have her civil ID yet, and we are waiting til she does to try for her license. Meanwhile we are told you can drive with a US license here for 2 months before having to get a local license. After that it can be a serious offense to drive without a license.

Anonymous said...

Hi JC and Kerri,

Thanks again for the very useful information.

Keep up the good work with posting your experiences in Kuwait.

All the best,

Jeff

Tammer said...

Hey. Thank you so much for this post! My wife and I are in the exact same boat, having moved here in 2007. I will be doing the same thing you recommended and extending to meet the bona fide test. Thanks again!

Anonymous said...

Thank you for providing the feedback on ExpatCPA. I am in the process of deciding between HR Block or ExpactCPA. I was a bit nervous about them because they are out in LA and really didnt feel comfortable sending private info online...