Monday, March 16, 2009

I Need a Clone (or Five) & Some Tax Info

Seriously. Personal clones would be so nice to have as I could be in all of the places I need to, doing all of the million things I have on my plate, and since they would be clones of me, I wouldn’t have to worry about how it is all being done.

Case in point—in order for our brand new stove to work, the maintenance has to come and change some parts so that it will work with natural gas as it is currently configured for liquid gas (as were ALL of the stoves in Ripley). This is a free service, but you still have to schedule the service and as well all know how that goes in Chile: “Ok, we will stop by tomorrow. Oh and no, we can’t call to tell you at what time.” These sorts of things aren’t problematic to people who work at home, or don’t work at all and are just at home all day. But with both people in the household working, it is just a pain in the ass. My husband first said “Hmm, well I guess I’ll just give the conserje (doorman) the keys so he can let them in.” Seriously? If we hadn’t be g-chatting, I would have smacked the back of his head. What is he thinking?! I would never ever ever EVER take that route, even though I trust the conserje Pablo, I certainly don’t trust the maintenance guys. And since the jackasses won’t call to tell you they are on their way, my husband can’t really plan on being home when they get there. His work pretty much requires his physical presence. So how do we solution the problem? I’ll tell you tomorrow how it actually goes, but this is the plan: Christian called the maintenance company and asked them to come in after 1:30pm as I asked to work from home for the afternoon. The maintenance people said they can only put “PM” next to our name. Hopefully they pay attention to the PM (unlike the people who delivered these appliances) and get there in the afternoon. We are going to give the conserje our phone numbers so that if they show up before I get home, he can call us and hopefully Christian can dash out to meet them or cagamos (we’re screwed) and I stay at work instead of going home. My boss already ok’d me to work from home in the afternoon and since most of my work is internet/computer based it is easier to do so. Except we don’t yet have internet in our new place, but we still do in our old place. So I’ll be camping out in our old place working, and put a note next to the timbre (doorbell) at the new place that they have to come to the old place first. Sounds confusing right? Good thing the new apartment and the old one are in buildings right next to each other. In fact we get our internet signal in the new apartment, but it is pretty weak and I don’t want to deal with slow internet when I’m trying to work.

So obviously if I had a clone, I would let her stay home tomorrow and I would come to work (or vice versa) and thus problem would be solved. She wouldn’t need internet so she could stay in the new apartment and we wouldn’t have to worry that the maintenance guys show up before I get home. She could also be cleaning the kitchen and organizing the rest of the house during the day which are things that I have no idea when I’ll be able to do. I could actually use a second clone to answer the bagillion emails I have pending and a third clone to work on wedding stuff—like practicing doing my own up-do, designing the labels for the invites, investigating traveler’s insurance, looking for wedding rings (we didn’t end up getting them a few weeks ago like I had though we were going to), etc. Oh and I’d clone a fourth to work on my taxes which are seriously time-consuming. I'd then clone a fifth me and one of my husband so we could hang out together all day long. :)

Speaking of taxes…I have found out some really interesting information for those of you from the US who are married to a Chilean (or other foreigner). I suggest you read Publication 54 from the IRS website as a way to get started. Don’t forget to check into whether or not you have to pay Chilean taxes and use such amounts as exclusions or deductions on your US tax forms. The Servicios de Impustos Internos has a FAQ section for extranjeros. Just as an FYI—we DO have to pay taxes here as per the law. The Income Tax Lay (Ley Sobre Impuesto a la Renta) states the following in Paragraph 3, Article 3:

“Salvo disposición en contrario de la presente ley, toda persona domiciliada o residente en Chile, pagará impuestos sobre sus rentas de cualquier origen, sea que la fuente de entradas esté situada dentro del país o fuera de él, y las personas no residentes en Chile estarán sujetas a impuesto sobre sus rentas cuya fuente esté dentro del país.

Con todo, el extranjero que constituya domicilio o residencia en el país, durante los tres primeros años contados desde su ingreso a Chile sólo estará afecto a los impuestos que gravan las rentas obtenidas de fuentes chilenas. Este plazo podrá ser prorrogado por el Director Regional en casos calificados. A contar del vencimiento de dicho plazo o de sus prórrogas, se aplicará, en todo caso, lo dispuesto en el inciso primero.”


Summary: You have to pay taxes only on the money you earn from Chilean sources for the first 3 years of your residency and not on your worldwide income (as is the case in the US). After those first 3 years, you have to pay taxes on your worldwide income unless you extend the period.

How you calculate your Chilean taxes if you work for yourself and not at a company is outside my scope of knowledge. My company takes out the necessary taxes from my paychecks and so I luckily don’t have to worry about that stuff for now.

And finally, some friendly warnings (I have taken an Income Tax class at CU Boulder and thus probably have more experience than the majority of the population, but not as much those who have had more than 1 tax class, obiv. In any case I want to share advice I learned through suffering through that semester of income tax in order to make the process as painless as possible for you all):
  • Read all applicable instructions when filling out US tax forms. Many times what you read on the form will mean one thing to you, but in the “tax world” will mean another thing. The instructions are pretty straight forward in the sense that they are easy to read and that you shoulnd't read into them more than the words that are written on the piece of paper. (And interesting fact is that supposedly the instructions are written for a 4th grade reading level, however you will probably find this is not the case. It is a different sort of logic which is why I say just literally read the words and do as they say.)
  • If you think you found some awesome loophole or that something sounds too good to be true, it probably is. The people who wrote the tax law and instructions are smart as shit so don’t think you will outsmart them unless you hired a tax specialist who is following the rules and isn’t pulling some shady tax treatment.
  • If you are stuck on something, google it and see what other people have done. For example, I didn’t know if I had to put “Single” or “Married” on my 1040 since I am only married in Chile and if I put “Married”, do I put “Married Filing Jointly” or “Married Filing Separately”? I googled it and found out I have to put “Married” because if you are married in any country the IRS considers you married. And as for which “Married” box I fill out, well that depends on a whole bunch of other factors, but basically I can pick either one depending on which results in the least amount of tax liability.
  • Print out the forms you need, but I wouldn’t print out the instructions (I just look at the instructions on my computer). It helps to have them in front of you when you are reading the instructions. Also, fill them out with a pencil as you will be erasing quite a bit--trust me.
  • Take your time—seriously the 1040 can take you hours to complete if you have a lot of deductions or adjoining forms to complete. Those of us with foreign income are in for even more time as you have to make sure you understand the process and which forms you need to fill out and by when (there are some automatic time extensions to file if you are living outside the US, there are other extensions you can apply for so that you have more time to fulfill the qualifications for the Foreign Tax Income Exclusion, etc.).
  • If it all seems way to complex and you get frustrated, look into hiring someone to do your taxes. It might put you out $200-500 but depending on your risk level for audits (if you are self-employed they are higher than those of us who work for companies) and your available time, it might be worth it. (I would, however, recommend that you research the things that you are required to report especially if in special situations such as married to a non-resident foreigner as not all tax experts have experience in such areas. It might be worth it to reserach yourself, then hire them, and ask them a million questions to make sure they do it correctly and don't accidentally not catch something. But, hey, that's just me.)
  • Last but not least, good luck, have patience, and welcome to the adult world (or at least that is what I feel like doing my own taxes means, hahaha, no more 1040-EZ forms to fill out).

3 comments:

Mamacita Chilena said...

Hmm, pretty sure my accountant told me to file as Single. I'll have to double check on that.

Taxes are SO freaking confusing. To me it's definitely worth it to pay someone , or buy the software that takes you through it all step by step!

La Chilengüita said...

@Mamacita Chilena--I would definitely check into the Single vs. Married thing. I originally thought I could mark single too, but unfortunatly all of my research points to the fact that we cannot. In most cases, filing Married will give you a larger deduction, but that depends on if you file jointly and a million other variables. When I was investigating which box to check, I searched forums, blogs, etc. which all gave me a good idea that, yes, I had to mark married...but it wasn't until I came across this article (http://www.msnbc.msn.com/id/12210529/) on msnbc.com that I was sure about it. I never once found something that said that I could file single. The difficult thing is deciding on if you file jointly or separately as with one your spouse has to report worldwide income and with the other your spouse does not (unless they earned income in the US). Basically my plan is to do two separate 1040s and related documents (one as Married Filing Jointly and one as Married Filing Separately) to see which one offers the least amount of tax liability.

P.S. I just came across another site (http://international.tamu.edu/iss/taxinfo/taxesfaq.asp#married_spouse_abroad) that I consider trustworthy that says you must file Married (don't worry about the part that says you must file separately as in this case they are referring to International Students. As a US Citizen married to a non-resident alien, there is an exception that you can choose to do Married Filing Jointly if you want. Again I suggest consulting Publication 54 and any related publications that are mentioned in that one.

Saludos!

Maeskizzle said...

Thanks for posting on this! I've been meaning to figure out what I need to do for like a month now and you've given me the push to look into it.

Disclaimer—La Chilengüita is a blog created upon my personal experiences and which expresses my personal opinion that in no way represents the views my employer, family or friends.