The Asia Chronicles: Basic US Tax Issues in Asia, Middle East and Russia

[Ed. note: This post is authored by Evan Jowers and Robert Kinney of Kinney Recruiting--sponsor of the Asia Chronicles, and an ATL advertiser. Kinney has made more placements of U.S. associates and partners in Asia than any other firm in the past two years. You can reach them by email: asia at kinneyrecruiting dot com.]
Evan here, writing from Hong Kong, where we just made two more US associate placements last week and expect another one this week. I just arrived back in Hong Kong late last night, after a family holiday in Bali, and planned to return to US today, but a couple of pending partner level placements in Asia by our team has caused a stay in Hong Kong for another 10 days. Robert is heading back here on Friday. Before Bali, Robert and / or I had been in Tokyo and Hong Kong all of November, for the usual meetings with firms and candidates. Actually, you can catch a photo during my last week in Hong Kong in Sunday's NY Times: Lawyers Wanted, Abroad That Is
As Robert explained in yesterday's post, I was unable to post Monday as I had planned. A client is in our HK apartment this week, so while I was in route from Bali yesterday, I relied on admin to get a HK hotel and things did not work out too well with that. Today, I am back in normal hotel digs and am back up and running, with internet and all. Last week we discussed expat allowances in Asia and Middle East. This week we deal with basic expat tax issues. The next post will be on additional expat allowances for associates with children, something firms ask me for advice on routinely.
As always, please feel free to ask any questions in the comments area. Please note that I am writing off the top of my head and am not preparing a tax memo for you (as I would in my days as a biglaw tax associate years ago), so also please feel free to give more details and correct me where need be in the comments area. It would be great for US associates in Asia, Russia and Middle East to join the discussion, as you have experiences filing such taxes after all. This is very basic information, so let's feel free to get into more detail in the comments.
You probably are well aware and recall from Federal Income Tax back in law school, US citizens and green card holders (both groups, combined, referred to as "US persons") are liable for US income taxes while abroad, although with a credit given for any income taxes paid to the foreign jurisdiction they are residing. However, US persons do not have US tax liability on their first $87,600 earned abroad (this is the number for 2008, but rises a little bit each year it seems). Of course, this advantage is nullified if the jurisdiction you are working in has higher income tax rates than the US.
More after the jump
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[Ed. note: This post is authored by Evan Jowers and Robert Kinney of 


