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joysyt
New Member

Double Paying Taxes for Singapore & US?

Hi there,

 

I have been working in the US on a H1B work visa, unfortunately it expired (maxed out) in January 2022 so I returned to my home country of Singapore and continued working for my US company from there. I am in the middle of the employment-based green card process, so when I received my I-140 and could extend my H1B visa, I did so and returned to the US in October 2022.

 

What this meant was that I worked in Singapore from January to October 2022, and since it was for the US company, I was still taxed as a US resident alien. However I am paying Singapore taxes for the same US income, as Singapore tax is based on me being located in Singapore, regardless of income source.

How can I claim the amount I'm paying for Singapore taxes from the US taxes, since I am being double taxed for the same income?

 

Also, Singapore's tax filing date is also 4/15, and I'll likely pay the Singapore taxes after 4/15. How would that work in terms of filing taxes in the US - should I request an extension till October, and then claim the credit back after I've paid the Singapore taxes?

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1 Best answer

Accepted Solutions
ThomasM125
Expert Alumni

Double Paying Taxes for Singapore & US?

You can get a credit for the taxes you paid to Singapore on your US tax return. Look in the Deductions and Credits section in TurboTax, then Estimates and Other Taxes Paid, then Foreign Taxes. The taxes paid or accured are deductible, so you wouldn't have had to pay the taxes in order to deduct them, you would just have to know the amount due even if you paid them later in the year. However, you need to make an election to accrue the taxes by making sure you have checked the appropriate box on Part II of Form 1116 Foreign Tax Credit. Once you make the choice to accrue the taxes, you must use the same method going forward.  You can learn more here:  Foreign Tax Credit

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3 Replies
ThomasM125
Expert Alumni

Double Paying Taxes for Singapore & US?

You can get a credit for the taxes you paid to Singapore on your US tax return. Look in the Deductions and Credits section in TurboTax, then Estimates and Other Taxes Paid, then Foreign Taxes. The taxes paid or accured are deductible, so you wouldn't have had to pay the taxes in order to deduct them, you would just have to know the amount due even if you paid them later in the year. However, you need to make an election to accrue the taxes by making sure you have checked the appropriate box on Part II of Form 1116 Foreign Tax Credit. Once you make the choice to accrue the taxes, you must use the same method going forward.  You can learn more here:  Foreign Tax Credit

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
joysyt
New Member

Double Paying Taxes for Singapore & US?

Thank you so much for your quick response! I found the foreign tax credit section and will complete it accordingly, this really helps! 🙂

pk
Level 15
Level 15

Double Paying Taxes for Singapore & US?

@joysyt , while generally agreeing with @ThomasM125 , I would  like to add the following

(a) since the actual work was done in Singapore , for US tax purposes this is foreign income and therefore eligible for Foreign Earned income exclusion  or foreign Tax Credit / Deduction.  Your US employer  was in error , treating you as local employee.  However the good news out of that is  1. your normal federal taxes have been withheld at source, your FICA taxes have been  withheld/paid.

(b) Since Singapore tax year is calendar year,  the amount of tax due to Singapore as a resident was hopefully paid  and if not then file the Singapore return  first so you have a proper figure of the assessment. Then use this as the taxes paid to a foreign taxing authority.

(c) When completing form 1116 ( as described by @ThomasM125 ) declare the income while in Singapore as your foreign  income and  foreign taxes paid  as paid.  Note that while the foreign taxes paid is recognized  dollar for dollar, actual amount allowable for the tax year is based on a  foreign income to world income and thus can be a bit less than  the actual amount of foreign  taxes paid ( depending on the exact  facts and circumstances ).  The disallowed portion of the credit may be carried back or forward as  long as there is foreign income in those years. Thus it tends to be , at best, asymptotic.  You can also deduct the taxes  ( like states taxes  ) if you itemize but again you have SALT  ( State And Local Taxes ) limit of 10KUS$.

(d) Note that  if  the final taxes paid to foreign taxation authority is different  than  what you claim on form 1040/ form m1116, then once the dust settles, you may have to file an amended return to IRS / State recognizing this.

(e) Note that Singapore does not have a totalization agreement with the USA and thus you may have to pay Social Security / Medicare  equivalent taxes to both country.

 

Does the above make sense ?  Is there more I can do for you ?

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