I’m KS from Malaysia. I’m going to hold a L1 visa and I will be transferred to the Florida factory under 2 years contract soon. The Florida factory will pay me a monthly fixed allowance (instead of salary or wages). I will still be getting my salary in Malaysia. I would like to check should I need to pay tax from my monthly fixed allowance in Florida? If yes what should I file in the USA IRS?
Thanks very much.
The money paid to you anywhere on US soil is subject to taxation. If this is a fixed allowance, a standard tax of 30% will apply and you will not be allowed any deductions. Paying tax will be important because your employer will be reporting the money that he is paying to you under your FEIN or SSN; so even if you choose not to report the income, it has already been reported. This might be a good time to negotiate some relief from your employer for this; such as requesting $130 or at least $115 if you are being paid $100. They can keep the extra money but give you a check when it is time for you to pay taxes.