Thursday, June 08, 2006

Tax Increase Prevention and Reconciliation Act of 2005

We went to a tax seminar hosted by AmCham Singapore to find out more about this "tax cut". Congress was very sneaky on this one (what else is new??). The act was signed into law May 17, 2006 and changes the rules for the Foreign Earned Income Exclusion. The changes are retroactive to January 1, 2006. In short, we ex-pats are facing a substantial tax INCREASE. The regular people like us (not millionaires) will pay much more than the wealthy. Does this sound familiar?

The tax situation for us for 2005 is still up in the air. We have had to hire an accounting firm to help us; it is just too complicated. Even the accountants can't get the numbers reconciled. 2006 will be even more complicated and costly. This increase will in effect make Americans living abroad even more expensive for the companies sponsoring them.

Please check out the article from The International Herald Tribune.

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