Originally Posted by
FLMD11CAPT
Lets see........that "small" exempted amount of 80K puts approx. $21,600 back in your pocket instead of paying it in tax to Uncle Sam. Couple that with the $4500/mo COLA we are hearing about...4500 x 12 = $54,000, $54,000 + $21,600 = $75,600. Hmmmm......might defray "some" of the costs of living in HKG/CDG.
Actually, I believe the way it works is that from 0-80K you pay taxes just to the foreign gubmint, from 80K+ you pay to both. The US gubmint allows the expemption to offset what you pay to that foreign gubmint. The point of FedEx using Price Waterhouse would be to compute a "gross up" paid directly to the foreign gubmint to offset the amount after 80K (or offset all if you're not eligible for the exemption). The reason that SFS is such a sweet deal is that the Philipine gubmint does not tax those living in the free port zone, hence the windfall for some of the SFS guys. This is the way I understand it, someone correct me if i'm wrong.