Living Overseas Temporarily

[TheNewGuy]

Anyone ever done this? I am looking into living in Australia under the work-holiday visa (lasts 1 year). I've done lots of research, but a few questions linger:

1) How are earnings taxed? I think I saw online that anything up to $90K is exempt in the U.S. Anyone know any different? Are you essentially double taxed for any amount over that threshold?

2) Insurance. Health, car, etc. Will my U.S. insurance cover these while I am overseas? What does travel insurance cover?

3) Finding a job. For anyone that has done it before, how difficult was it? I've been in preliminary contact with temp agencies, with moderate success so far.

4) Anyone lived in Australia? I've visited, but I haven't spent much time in any of the major cities (1 day in Sydney). I was looking at Brisbane because of the lower cost of living and central location.

 

[Uninformed]

1) How are earnings taxed? I think I saw online that anything up to $90K is exempt in the U.S. Anyone know any different?

Correct.
The amount of foreign income a worker can exclude from U.S. taxation on a 2009 return is $91,400, up from the prior year's $87,600. The low inflation rate means that for 2010, the excluded income amount edges up to just $91,500.

While the excludable-income amount is slightly higher, a law enacted in May 2006, the Tax Increase Prevention and Reconciliation Act, or TIPRA, changed the way any tax on remaining foreign income is figured.

Before TIPRA, after an overseas worker subtracted the exclusion amount, the worker was then able to figure U.S. taxes based on the remaining income. Now, however, regardless of the final taxable dollar amount, it is taxed as if it were still in the bracket it would have been in before the exclusion was allowed.

This means that expatriate workers will lose the tax-reducing value of the lower brackets in our progressive tax system. For example, if you make $100,000 overseas, your tax bracket is based on that amount, not just on the $8,600 you have after subtracting the $91,400 exclusion from your overall $100,000 income. So instead of figuring taxes on the $8,600 by beginning at the 10 percent bracket and working up through the progressive tax scale, the foreign-based worker would calculate his or her tax bill by starting at the 28 percent bracket into which the pre-exclusion income amount falls.


2) Insurance. Health, car, etc. Will my U.S. insurance cover these while I am overseas?

Depends on the country. When I was in the Czech Republic, the company picked up the tab. However, in the Czech republic, they have socialized medicine whereby I went to the hospital and was treated for free. Of course, the language barrier can be a problem as they gave me a pain reliever that made me hallucinate.

3) Finding a job. For anyone that has done it before, how difficult was it?

Depends on your qualifications. I don't know what level job you are qualified for. Hayden Horn taught English in Japan which is a fairly common job coming out of school. On the other hand, it might be difficult to work as a VP of engineering for Mitsubishi. It all depends on the type of job and your qualifications.

4) Anyone lived in Australia? I've visited, but I haven't spent much time in any of the major cities (1 day in Sydney). I was looking at Brisbane because of the lower cost of living and central location.

I have not. I did have a friend who was relocated to Australia by Clontech, a biology research tool company, to act as a direct sales agent for the company. He had some advantages, however. One, he was a Texan. Two, he was extremely well qualified and great at his job. Three, he was close friends with Kary Mullis, loved to surf with the more quirky researchers, and lived in San Diego before his relocation. Four, he begged, a lot.



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[TheNewGuy]

My qualifications: I'm a McCombs grad in Finance/Accounting and an attorney. Just passed the bar last July though, so not a ton of work experience (on the law side anyway) at this point.

Thanks for the info so far.

 

[Uninformed]

What do you want to do, International Law, Contract Law, or do you want some easy job where you can have fun and see the world?

 

[TheNewGuy]

I am shooting for a paralegal or accounting job, since from what I've read, I believe I would have to have 5 years of U.S. law practice under my belt to be eligible to practice law in Australia. Hopefully future U.S. employers will see it as a positive learning experience rather than a career joy-ride. I am in talks with one temp-law agency, he suggested oil/gas/mining law work. We will see what becomes of that.

 

[Uninformed]

Think how you would perceive it if you were an employer. A lot has to do with the actual overseas job in which you work. If you plan on using law and accounting in the future, the job would need to use one or the other: I wouldn't think a paralegal position would be looked at in a positive light, however. Accounting, however would so that is a possibility. But of course if locals can do the job as well as you can then there isn't a lot of impetus to hire you. Perhaps the UT business school placement office can help you though. As for types of companies, international companies that need US markets would be possibilities (for example defense companies such as Thales or Fosters), large local companies that want to reach US markets are a possibility as well. And finally just large companies that operate only in Australia are a possibility (such as Healthscope or National Australia Bank). A lot of it depends on what you want to get out of it as well. And that is what you have to think about. Here, we don't know anything about your goals. You may not even want to practice law.

 

[TheNewGuy]

I think i can sell AUS employers and future US employers that this is a learning experience. Mostly because it will be.

I have basically 0 experience as a lawyer anyway. Why would a paralegal position be a downside? At least it is law firm experience.

It's funny, my parents, who are usually pretty conservative, absolutely LOVE this idea. I see this as my one shot to branch out and take a chance, before I start having kids.

Anyone who has been in Australia, which city would you live in long term?