Looking to move to Honduras

[squideast]

What is the name of your state (only U.S. law)? GA

I live in Georgia, and work for a company here in Georgia. I am interested in moving to Honduras (not sure if temporarily or permanently, but at least for 1-2 years, and will likely spend 330 days of 365 there). I will keep a GA mailing address (my mother's home), but will be selling my house here. I will keep my US job and work remotely (I do not need to be "in the building" for the work I do).

I am trying to figure out taxes, health insurance, and Lord knows what else. Can anyone tell me "how" I will pay taxes? To both countries or just the US for income tax? And just federal in the US?

I also realize the above says "only U.S. law", so if I can't get this question answered here, that's OK, just let me know that too Giving it a try there hough, because all of my Internet searching over the past week is really hurting my head.

Thanks!

 

[stratford]

Hi Squideast,

I am not a lawyer but I have a little knowledge in this area.

Generally, if a U.S. citizen lives and work in a foreign country they will pay taxes to that foreign country just like your neighbors there do (i.e. if you live in London and work for the BBC, you will pay taxes to the UK government at the same rate as any ordinary Londoner). There are however some foreign countries, and perhaps some job situations, where this principal does not apply.

You are still required to file a U.S. tax return EVERY SINGLE YEAR. If you have any foreign "financial accounts" with an aggregate value of over 10K, you will also have to file something called on "FBAR" (there is lots of information on the internet about FBAR requirements). In order that you are not "double taxed" by both governments, you can avail of either the Foreign Earned Income Exclusion, which allows you to exclude all earned income from taxation up to a certain ceiling (I think last year it was around 80K) or the Foreign Tax Credit (Form 1116), which allows you to credit the taxes paid to the foreign government to your IRS tax bill.

The situation above is how it works for people who work in a foreign country. Your situation is a bit unusual in that you will employed by a U.S. company with your actual office in GA, but whilst telecommuting from Honduras. It seems likely to me that in your scenario, you will continue to pay your income taxes as normal and NOT pay income tax to Honduras, but I just don't know...

If you don't get an answer here, I would try some of the expat discussion boards out there -- I am sure there are others in your situation who "telecommute" to the U.S. from overseas. I would also consult with a tax lawyer to be on the safe side, but I would do a lot of research online first because you can probably get a lot of good answers from doing your own research first. A lawyer should be used to "fill in the gaps" after you have done your own research, in my view, unless of course you like throwing lots of money at lawyers

On the health insurance -- it varies from country to country. Again, I would check with expat discussion boards and blogs. You would be surprised how many expats are out there with useful and interesting websites.

 

[squideast]

Thanks so much for your advice - much appreciated

 

[LdiJ]

What is the name of your state (only U.S. law)? GA

I live in Georgia, and work for a company here in Georgia. I am interested in moving to Honduras (not sure if temporarily or permanently, but at least for 1-2 years, and will likely spend 330 days of 365 there). I will keep a GA mailing address (my mother's home), but will be selling my house here. I will keep my US job and work remotely (I do not need to be "in the building" for the work I do).

I am trying to figure out taxes, health insurance, and Lord knows what else. Can anyone tell me "how" I will pay taxes? To both countries or just the US for income tax? And just federal in the US?

I also realize the above says "only U.S. law", so if I can't get this question answered here, that's OK, just let me know that too Giving it a try there hough, because all of my Internet searching over the past week is really hurting my head.

Thanks!

Any US citizen or permanent resident must report and pay tax on their world wide income. They do get a certain amount of exclusion for foreign earned income, but I don't think that is going to apply to you with your specific job situation. You do also however, get credits for any foreign tax that you pay on your income.

So, if you end up paying tax to Honduras, you will get credit for that so that you will not get a "double dip".

Where things could get tricky with you is state taxes. If you are going to maintain GA residency for your driver's license, voters registration, employee benefits etc, and your employer insists on continuing to withhold state tax, then you may still end up paying taxes to GA, without any state credit for foreign taxes paid.