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Joe C.

Joined: 08 May 2003 Posts: 993 Location: Witness Protection Program
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Posted: Wed Aug 01, 2007 12:20 am Post subject: |
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naturegirl321 wrote: |
I agree that we shouldn't have to file if we live outside the US. I think the US is one of the few places that taxes citizens would DON'T live there. However, I still think it's illegal if you don't file. Which is why I'd like to opt out. |
Unless you meet a certain threshold, I don't think you are obligated to file. One condition that might apply to most teachers living and working overseas is the requirement to file if you earn more than $400 from self-employment. But then again, how is the IRS to know how much, if anything, you earn?
Also, if you have self-employment income aren't you also obliged to pay FICA on that income even though the actual income might not be enough to have to pay normal income taxes? |
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tedkarma

Joined: 17 May 2004 Posts: 1598 Location: The World is my Oyster
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Posted: Wed Aug 01, 2007 2:10 am Post subject: |
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Joe C. wrote: |
Doesn't one have to work at least x amount of quarters immediately prior to retirement before they can get Social Security -- regardless of how much they've paid in over their lifetime? |
No - you don't have to work/pay taxes immediately preceding your retirement. But, yes, you do have to work a certain number of quarters to be eligible.
Roughly the same situation here Spiral - but I have filed every year as I have income property in the States. It is not uncommon for people to do 10 years of back taxes - costs a little bit - but usually is no problem. My guess is that it wouldn't be difficult to do it yourself - though I usually pay a CPA as I am paranoid . . . |
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mdk
Joined: 09 Jun 2007 Posts: 425
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Posted: Wed Aug 01, 2007 2:36 am Post subject: |
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For what it may be worth, it is a simple matter to file from overseas. I did it this year using an online tax program. The $35 for the basic service was a deductible expense. I did an e-file and so my refund was deposited into my credit union account in the states in a few weeks. I took it out by the ATM and had some fun with it. It was only about $40 but it was worth the effort.
Social Security depends upon paying in for the requisite number of quarters. They compute the amount on your highest salary for those quarters. So it is to your advantage to contribute even $1 for every quarter you work, and that was all covered by the online tax filing program.
My SSA would be enough to live comfortably without working in Madrid or Moscow. Whatever I might make by taking privates is jam. Provided I don't earn (or they find out about) more than the limit which is, as I mentioned, a bit less than 13,000 this year. There is a COLA adjustment each year. |
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Glenski

Joined: 15 Jan 2003 Posts: 12844 Location: Hokkaido, JAPAN
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Posted: Wed Aug 01, 2007 11:52 am Post subject: |
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Unless you meet a certain threshold, I don't think you are obligated to file. |
And, just what would that threshold be? Let's check, however by virtue of the fact that everyone's situation is different, how else can the IRS know what you have earned, abroad or in the USA, unless you file? That's why you are obligated to file.
From the IRS web site:
http://www.irs.ustreas.gov/prod/cover.html
United States citizens living abroad are required to file annual U.S. income tax returns and report their worldwide income if they meet the minimum income filing requirements for their filing status and age.
http://www.irs.gov/publications/p54/ch01.html
If you are a U.S. citizen or resident alien, the rules for filing income, estate, and gift tax returns and for paying estimated tax are generally the same whether you are in the United States or abroad.
Your income, filing status, and age generally determine whether you must file an income tax return. Generally, you must file a return for 2006 if your gross income from worldwide sources is at least the amount shown for your filing status in the following table.
Filing Status* Amount
Single $8,450
65 or older $9,700
Head of household $10,850
65 or older $12,100
Qualifying widow(er) $13,600
65 or older $14,600
Married filing jointly $16,900
Not living with spouse at end of year $3,300
One spouse 65 or older $17,900
Both spouses 65 or older $18,900
Married filing separately $3,300
*If you are the dependent of another taxpayer, see the instructions for Form 1040 for more information on whether you must file a return. |
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naturegirl321

Joined: 04 May 2003 Posts: 9041 Location: home sweet home
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Posted: Wed Aug 01, 2007 3:00 pm Post subject: |
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I did married filing separately, becuase if we file jointly then for tax purposes we're both residents, which means I'd no longer be excempt for 80K. And I definetly made more than 3, 300 this year.
Glenski, did you file jointly or separately? |
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Glenski

Joined: 15 Jan 2003 Posts: 12844 Location: Hokkaido, JAPAN
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Posted: Wed Aug 01, 2007 9:47 pm Post subject: |
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naturegirl321 wrote: |
I did married filing separately, becuase if we file jointly then for tax purposes we're both residents, which means I'd no longer be excempt for 80K. And I definetly made more than 3, 300 this year.
Glenski, did you file jointly or separately? |
Separately, of course. My wife has no job and no US green card, has never worked in the USA, and we both live in Japan. |
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MELEE

Joined: 22 Jan 2003 Posts: 2583 Location: The Mexican Hinterland
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Posted: Wed Aug 01, 2007 10:43 pm Post subject: |
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Yeah, I don't understand why you are bothering to get your husband a number, I didn't even bother to tell the IRS I've been married for the last 4 years. My husband has never set foot in the US, as far as the IRS is concerned he doesn't exist. |
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Glenski

Joined: 15 Jan 2003 Posts: 12844 Location: Hokkaido, JAPAN
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Posted: Thu Aug 02, 2007 1:01 am Post subject: |
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MELEE wrote: |
Yeah, I don't understand why you are bothering to get your husband a number, I didn't even bother to tell the IRS I've been married for the last 4 years. My husband has never set foot in the US, as far as the IRS is concerned he doesn't exist. |
You are required to get an ITIN number for your spouse. If you are filing as a single person instead of married, you are providing the IRS with false information. Perhaps there is a penalty for this...?
It certainly makes a difference on what kind of tax is imposed on you. If you ever have to provide tax records for a child's financial aid application, this could become an issue. |
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naturegirl321

Joined: 04 May 2003 Posts: 9041 Location: home sweet home
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Posted: Mon Aug 06, 2007 5:33 pm Post subject: |
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I'd rather not mess with the IRS so that's why I'm getting him an ITIN. Because I filed separately I have to have him sign a power of attorney form so that they can give me info.
Still, six months later, there's no sign of his ITIN and they won't send it anywhere except here to us in Peru. I asked them to send it to my parents' address. I'm sure it's been sent and simply stolen before it even reached us. |
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rcprof
Joined: 06 Jun 2007 Posts: 1 Location: Choengju
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Posted: Mon Aug 06, 2007 7:19 pm Post subject: U.S. Income Taxes |
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I am not a tax lawyer nor am I an accountant. I know that U.S. citizens get relief on taxes if they are paying taxes in a foriegn country and they do not return to the U.S. for more than 30 days in any calander year. This was the law a few years ago, however as you well know things change almost on a daily baisis in the U.S. You should check witha tax lawyer or C.P.A.
As to Social Security to get retirement benefits you must have been paying into the program for a period of forty (40) quarters (this is ten (10) years). all legal employment in the U.S. whether fulltime or parttime requires payment. Go on line you can check your account status with the Social Security Admin.
Lastly Social Security and the I.R.S. are two separate entities and the laws are differant for both.
Be careful about what you say in public about not returning renouncing citizenship etc. That can turn out to be a can of worms at a later date. Good Luck. |
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merlin

Joined: 10 May 2004 Posts: 582 Location: Somewhere between Camelot and NeverNeverLand
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Posted: Mon Aug 06, 2007 9:03 pm Post subject: |
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Filing for taxes basically becomes important when/if you think about returning to the US. If you're really thinking abou never returning to the US, filing is really low on your priority list.
The problem would arise if you have any w-2s or other income from the US from house sales, stock dividends, etc. Then you could get into jeopardy if you make like $10, have to pay some taxes and then get a penalty for not paying. Then the penalties and interest add up over time.
Basically if you're absolutely sure you won't return to the US, there's little or no risk in not filing. If you're planning to return there's a slight risk in not filing. If you're planning to return and have some kind of income from the US (passive, earned, inherited or otherwise), there's a moderate to high risk if you don't file.
About the unconstitutionality of taxation and the IRS - be careful what you see on the internet about this. Several people who made videos are now facing jail time "frivilous lawsuits" or whatever filed against the IRS and are now facing jail time for their resistance to unconstitutional taxes. So it doesn't matter if the taxes are unconstitutional or not - you'll still face jail time if you mess with the IRS. That's something the videos don't mention because it happneded after they were made. |
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shuize
Joined: 04 Sep 2004 Posts: 1270
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Posted: Thu Aug 09, 2007 6:05 am Post subject: |
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naturegirl321 wrote: |
I did married filing separately, becuase if we file jointly then for tax purposes we're both residents, which means I'd no longer be excempt for 80K. And I definetly made more than 3, 300 this year.
Glenski, did you file jointly or separately? |
I do not understand the bold portion above.
I think more information is needed here. How does filing with your husband effect your residence status?
As I understand it, there are basically two ways to qualify for the foreign earned income exclusion mentioned earlier: physical presence or bona fide residence. The physical presence test means the taxpayer was abroad for a certain number of days within some portion of the last year (I believe it is 330 days, but it need not run from Jan. 1 to Dec.). Bona fide residence may look more difficult on paper but actually just means the taxpayer resided abroad over the course of a year with the intent to remain there for the foreseeable future. Brief trips back to the U.S. are allowed, but I think there is some maximum number of days after which the I.R.S. will automatically attribute U.S. residency (I seem to recall it is 183 days in the United States).
Regardless, I strongly encourage you to file. As a U.S. citizen, there is no way to legally avoid it. Check with a professional tax advisor, but I would guess that a good faith attempt to file could save you many headaches down the road.
Last edited by shuize on Thu Aug 09, 2007 6:18 am; edited 1 time in total |
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shuize
Joined: 04 Sep 2004 Posts: 1270
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Posted: Thu Aug 09, 2007 6:16 am Post subject: Re: U.S. Income Taxes |
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rcprof wrote: |
As to Social Security to get retirement benefits you must have been paying into the program for a period of forty (40) quarters (this is ten (10) years). all legal employment in the U.S. whether fulltime or parttime requires payment. Go on line you can check your account status with the Social Security Admin. |
I've mentioned this in other posts, but this also seems a good place to post it again.
U.S. citizens living in Japan should be aware that a recent social security treaty was concluded between these two countries which will credit social security payments made into either system. This is especially advantageous for U.S. ex-pats as the minimum period to qualify in the U.S. is 10 years compared to 25 in Japan. |
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The_Hanged_Man

Joined: 10 Oct 2004 Posts: 224 Location: Tbilisi, Georgia
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Posted: Thu Aug 09, 2007 7:17 am Post subject: |
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Just out of curiosity have any of you ever heard of an overseas teacher/worker being audited? It's not like we get W-2s, so how exactly would we prove our level of income?
It seems to me like we could claim whatever we want (within reason) on the forms and get away with it. I mean how many people claim their private tutoring income on their tax forms? I suppose as long as you don't get close to the $80k exemption the point is moot, but I was just curious. |
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Glenski

Joined: 15 Jan 2003 Posts: 12844 Location: Hokkaido, JAPAN
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Posted: Thu Aug 09, 2007 1:46 pm Post subject: Re: U.S. Income Taxes |
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[quote="shuize"]
rcprof wrote: |
U.S. citizens living in Japan should be aware that a recent social security treaty was concluded between these two countries which will credit social security payments made into either system. This is especially advantageous for U.S. ex-pats as the minimum period to qualify in the U.S. is 10 years compared to 25 in Japan. |
I asked the SSA about that. All they could tell me was that the amount of work in the USA that I had accrued (plenty before coming to Japan) was sufficient to warrant me collecting benefits from the American system.
What they didn't tell me and I would still like to know is this -- does that treaty mean I can collect from both countries when I retire? When you're talking about credits for the Japanese system, it seems to apply only to people who have been sent to Japan by their American office, not to people who are working for Japanese employers (like schools). Anyone know? |
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