Job Discussion Forums

[naturegirl321]

Is the foreign earned income exclusion 80,000 a year or 80,000 during your whole life time?

[khmerhit]

dontj you mean QUESTIONS?

[naturegirl321]

Sorry, the internet was slow. Anyone know the answer?

[ls650]

I think the answer, for Americans, was that the first $80,000 per year (!) of foreign income is untaxed. It must be nice; us Canadians get royally screwed over and are supposed to pay taxes on foreign income unless we declare ourselves non-residents.

The topic has been discussed in detail recently; trying doing some searches here.

[thelmadatter]

its $80,000 USD per year as long as you are in the country 330 out of 365 days (and not in one of those "BAD" countries like Cuba).

Yeah... Im sure glad Im not Canadian!

[tedkarma]

If you are legally "resident" in another country - you don't have to necessarily follow the 330 day rule (is my understanding) - I think the criteria is either or. Or would you disagree?

By legally resident - I would assume that you have to have the correct visa and resident permit (different in each country). But, I do think you need the 330 days the first year.

[thelmadatter]

Not according to my tax guy, ted

the US gov doesnt give a hoot about paperwork issued by a foreign country. What they CAN verify is if you were working in the US for a length of time; therefore, you either could or couldn't be out of the country 330 days or not.

This is from the IRS website http://www.irs.gov/faqs/faq13-3.html

[gaijinalways]

Yes, it is a qualified 80,000 dollars per year minus the percentage of days in the calendar year you were in the US (don't worry about other countries you visited, unless one of them was Cuba, Libya, or Sudan, and who knows North Korea). Fill out a 1040, don't take any deductables except the standard.

The 2555EZ can be used in most cases, as long as your income is not all passive income (in other words, if you have working income, it's fine, and shorter ) This is the form which you use to calculate the amount of exemption you get. Also remember to use the current yen rate through December of last year, this is linked from the IRS site on the Federal Reserves website.

If you have a bank account in the US and/or any mutual funds you'll need to file a schedule B as well for interest and regular dividends.

Unfortunately, the US Embassy in Tokyo no longer provideds forms as they no longer have a special tax office. But, don't worry, all the forms are online now at the IRS website, you'll need to print them out, or have a relative get them faxed or delivered and then sent to you (online is easier, if you don't have a computer online use a Internet cafe or a friend's).

[jr1965]

Does anyone know anything about freelancing in another country and paying US taxes? In other words, when I was working as a freelancer in the US, I was able to deduct operating costs as well as part of my rent, utilities (because I worked in a home office).

I'm currently living in Europe (and did for all of 2005), but continue to freelance for a number of US companies. They all sent me 1099 forms for the work I did in 2005. Can I deduct the rent I pay here, etc. as I did in the States?

This is probably best answered by a tax specialist, but I thought I would put the question out there in case anyone is doing (or has done) the same.

Also, as Americans living abroad, can we get an extension to file and pay taxes without being penalized?

Thank you!

[Glenski]

I don't know anyone who freelances at anything in Japan and declares taxes on it. Who is going to catch you if you get paid under the table?

If you got 1099 forms for work done, however, you may have to declare it because the IRS knows.

Americans have to file for taxes by April 15th if they live in the USA. If they live abroad, they have until June 15th to file.

[jr1965]

Hi Glenski,

Yes, I do have to file b/c the companies I worked for (all based in the US) have submitted 1099s to me and the govt.

Thanks, though, for the info about filing later. I will need the time to get all in order!

[happy_me]

if you have a mail address in a US state they will think you owe that state tax too so make shur you can prove you ane not in the state as well.

i just had my bank and stock frozen by the state and 2 days after they un froze it the IRS forz it for tax from 1987 withc they dont have any recoreds for?? any way all is ok just had to fax my passport to the state and they clered it. and the IRS too

[jr1965]

Happy,

THANK YOU for that important tip about the state tax. Here's the thing: I don't actually live in the US, but b/c my husband is a green-card holder (and not a citizen), we maintain an address in the US at my parents' home so that homeland security/the INS doesn't think my husband has "abandoned" his residency in America.

Anyway, I wonder if this means we'll need to pay state tax now, too? Time for me to consult a tax specialist. The trouble is, there are none that I know of here in Spain (the Embassy already said they couldn't help me).

Do any of you living outside the US have accountants prepare your US taxes? How do you do it? Have you contacted someone in the country where you live? Do you have a contact in the US?

[counpk39]

Here are two IRS publications which can answer some of the questions posted here. Both are Adobe Acrobat (pdf) files.

Tax Guide for US Citizens & Resident Aliens Abroad (aka irs pub 54)

Foreign Tax Credit for Individuals (aka irs pub 514)

Hope these help!

[JZer]