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Never Ceased To Be Amazed
Joined: 22 Oct 2004
Posts: 3500
Location: Shhh...don't talk to me...I'm playin' dead...
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 Posted: Mon Aug 17, 2009 3:26 am Post subject: |
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| leez wrote: |
what i picked up on from NCTBA's post was not paying taxes (which i equate to not filing a tax return). it was this (lack of) action coupled with student loans that have been purchased by the dept of education, that made me think about cross-referenced info that might end up on a state dept red alert file.
anyone want to send a pm regarding elimination of annual filing and consequences thereof, please feel free!
There is ABSOLUTELY no need for a PM here. It needs to be known by all potential U.S. overseas workers that all MUST file yearly with the IRS. Tax-free DOESN'T mean that one simply doesn't file with the IRS. They are much too sophisticated than that. I tested them about 10 years ago and was surprised to see how they keep tabs on filers.
What is "tax-free" is what is exempted under the law. Many people will see "tax-free salary" written as a perk by many employers some places in the world, but mostly they'll see it in parts of the Middle East where taxes are not levied. However, you won't see it, say, in Japan where an income tax is levied on all. in cases such as this, tax treaties are entered into to to avoid double taxation.
That being said, since W-2s are not issued by foreign governments, it is really up to the filer to determine what kind of "creative wriing" to engage in as anything that you provide to the IRS is solely dependent on you.
Providing that you pass one of two tests, Americans living abroad are given an $80,000 + foreign earned income exemption. This amount typically increases from year to year. Here are two sites that may be of interest:
http://www.businesstaxrecovery.com/foreign_income_tax_exemption
http://www.irs.gov/publications/p54/index.html
It should be made clear, however, that if you DON'T file taxes in the U.S., you will be liable for the entire amount earned in that year of living abroad just as if you earned it in the states.
The bottom line for U.S. taxpayers is that the exemption exists, but only if you qualify and file. For most teachers working abroad, you can be quite candid with how much you made...for others, some hedging may be required.
leezer
xo
ps. nctba, no worries. armed with partial intelligence, my vivid imagination fills in the blanks...not good or bad just, er, different!
I understand. No harm, no foul. 
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NCTBA |
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