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thelmadatter · Posted: Thu Mar 02, 2006 4:11 pm Post subject: yup

the exclusion applies only to money EARNED outside of the US not capital gains or dividends on assets owned within or outside of the US

dorowtesl · Joined: 23 Feb 2006 Posts: 6

With regard to "JR1965" and others post concerning the IRS notification, how does or not the IRS find out about income that you earned overseas (for example, from Korea) when no 1099 or whatever is generated by that foreign country ?

A question, would someone answer !

SteveD

naturegirl321 · Joined: 04 May 2003 Posts: 9041 Location: home sweet home

I heard that you're on the honour system.

Glenski · Joined: 15 Jan 2003 Posts: 12844 Location: Hokkaido, JAPAN

jr1965 · Joined: 09 Jul 2004 Posts: 175

SteveD

Only an American company will send you a 1099. I live in Europe, but I've been freelancing for American companies and thus, just like they would if I lived in the States, they generate a 1099 (it's what I get instead of a W-2 since I'm a freelancer and am responsible for making my own tax and social security payments).

I have to report income earned to the Feds b/c a copy of my 1099 has been sent to the govt. However, I found out (after speaking to someone on the International Tax Law Hotline (phone number is posted below)) that I may be eligible for a foreign income exclusion if I've lived and worked out of the US for a certain amount of time (330 days) and if I've made less than $80,000.

If you've been living and working in another country and have been paid by a company in that country, you have no problems. You're supposed to file a 2555 stating what you've earned for the tax year, but for years when I was working in Asia, I had no idea I needed to do this, although as others point out, it can't hurt to file the form. It's a single-page form you can download off the www.irs.gov website. The only time you'd need to report earnings and pay tax to the US govt is if you made over $80,000 from foreign earned income.

I hope this helps. If you have other questions, call the number below. The person I spoke to there was VERY helpful and knowledgeable (quite surprising given the other times I've spoken to IRS reps in the US; I think it has something to do with the fact that all they handle are the international cases). They also answered the phone right away�a big plus if you're calling from overseas!

International Tax Law Hotline phone number
(215) 516-2000

dorowtesl · Joined: 23 Feb 2006 Posts: 6

JR1965:
Thanks for the IRS notification post. The content confirms what others have stated regarding the report of overseas income (Honor system).

The reason is that I am planning on working overseas and at the same time collect Social Security (at 62) and the SS (no relation to Nazi Germany Storm Troppers) has rules, hours, and income levels to take into consideration.

To sum it up for the baby boomers among us, you can start collecting social security payments at 62 (at a reduced rate), work overseas draw salary, have medical benefits (sometimes paid by your employer) carry you from 62 to 65 (Medicare time) and not have to worry about all these income, hours and other rules and such.

At least that's my plan.

Regards,

SteveD

sock · Posted: Fri Mar 24, 2006 4:09 pm Post subject:

Can someone clarify exactly what needs to be done for state taxes if you get your 1099s mailed to somewhere in the US? Do you need to send copies of your passport?

I looked on my state's (Illinois) website for taxes and understand that if I am gone for over a year (which I was/am) then I am not a resident of the state, however, my mailing address is still in the state.

Does anyone have any advice? Know what they do in my state (or even yours)?

Thanks!