Changing Jobs - From Pesos To Dollars Question

[aholm]

Hello,

So, in a nutshell, I've been offered a job that I think is a really great opportunity for growth and something I am interested in. I'm currently earning in pesos with a company that relocated me to Argentina, that is registered in Argentina (so, everything in blanco).

I would go from that, to earning as a US Private Contractor, being paid in USD, abroad.

This leads me to several questions before I accept. Hopefully someone here can guide me a bit:

1) Tax situation - any guidance on what kind of taxes I would pay in the US as an American living abroad? How does it work with private contractors? Anyone in this situation currently?

2) Is there any way that this changes my living situation as someone with a "recibo de sueldo", etc. that might negatively affect me? I already have a DNI and residency.

and the biggie:

3) The whole dollar blue situation...I've heard it's going to fall drastically, so my salary might be worth less (but then again, my salary is more protected from inflation).

Essentially, it's a job with a base salary. Since it is a sales-based position, there are earnings from commission that vary depending on production. So, in my base salary, I would be a bit below what I currently make - but have the opportunity to make a lot more. It's a calculated risk I'm generally comfortable with. I'm young and can afford to make a few mistakes and learn from them.

Given the whole dollar blue situation, is it dangerous to switch to earning in dollars? I always assumed it was better but...the whole CEPO thing...will they keep it, will they get rid of it....and what happens...completely confusing.

 

[estebandepraga]

In Argentina I would never ever be afraid to be paid in USD especially if you are paid abraod and can from time to time bring the crisp $100usds here in cash!Go for it!

 

[citygirl]

On the phone so can't type easily. But you mentioned being a private contractor. Do you mean 1099? If so, important to realize that you are responsible for employer AND employee taxes. That is a big difference.

Also presumably you have a work visa and not a pern resident. That is tied to company abd job. What will you di with residential status?

 

[Matt84]

G'd bless America.
Maybe you can defect to the IS and be able to earn your money away from the grasp of the IRS
but compared to earning in Elite/Scott/Higienol pesos, better bear Uncle Sam's burden

 

[nkotb]

Talk to a tax lawyer. But according to IRS publications, which for some reason I can't link to (google "foreign earned income exclusion") your US tax situation shouldn't change based on the switch you describe. Income earned abroad is subject to the foreign earned income exclusion if you're performing the work abroad, even if your employer is in the US and your salary goes into a US bank account.

 

[Sleuth]

Your US tax situation does not change at all. You are required to pay US taxes on your worldwide income - earned here or from the US. As a resident of Argentina, you can take advantage of the foreign earned income exclusion. For 2014, that meant that $99,200 of your foreign-earned income is tax free. You still have to file taxes every year. You may be responsible for self-employment taxes which would be separate.

The big question is your visa status. Do you have permanent residency?

There is no question as to dollars or pesos. Dollars are better. Right now there is the dollar blue to take advantage of. If they devalue the peso at some point, your dollar is not going to be worth less. Plus, would they automatically increase your old peso salary to match the new exchange rate? Highly doubtful.

 

[HenryNisental]

I have worked in Mexico for GM for almost two years. If you work overseas at least 11 months a year, it is tax free, I think. Check with the IRS site in Internet.
You can be paid in the US anyway, and have to file with the IRS too, but you´will have big tax advantages.

 

[citygirl]

The foreign earned income exemption only applies to employee portion, not the employer portion. Which the OP will be responsible for if s/he is working as a 1099. That is about 15%. Taxes also need to be paid quarterly.

 

[Sleuth]

The foreign earned income exemption only applies to employee portion, not the employer portion. Which the OP will be responsible for if s/he is working as a 1099. That is about 15%. Taxes also need to be paid quarterly.

Yep, here's the IRS page on paying self-employment tax.

Another thing to consider is that when you're a contractor, you can start to deduct business expenses - cell phone, landline, Internet access, airfare to the US, car rentals, office, co-working, laptop, etc. You may come out quite a bit ahead...

 

[aholm]

I have a 2 year permanent residency. I don't think this would change if I changed jobs.

No, I'm not trying to evade taxes, I'm trying to see how much I would pay. Thanks, Dave and everyone else for the help!