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GlobalDawg
Joined: 24 Jan 2003
Posts: 91
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 Posted: Fri Oct 02, 2009 4:59 am Post subject: Filing Back Taxed--US/IRS |
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I know that there are quite a few threads with regard to filing late with the IRS and I will research. On the other hand, can anyone out there cut to the chase and suggest which forms should I file? As an expat do I need to file any other than either the 1040 or the 1040EZ? Also, I have employment verifications but I don't have W-2 forms or any proof of salary for the years I need to file--What is the best way to address this issue? For the most recent years (the past 6) I have the actual contracts, but for a few years prior I don't have anything.
Thx,
GD |
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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: Fri Oct 02, 2009 5:44 am Post subject: Re: Filing Back Taxed--US/IRS |
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| GlobalDawg wrote: |
I know that there are quite a few threads with regard to filing late with the IRS and I will research. On the other hand, can anyone out there cut to the chase and suggest which forms should I file? As an expat do I need to file any other than either the 1040 or the 1040EZ? Also, I have employment verifications but I don't have W-2 forms or any proof of salary for the years I need to file--What is the best way to address this issue? For the most recent years (the past 6) I have the actual contracts, but for a few years prior I don't have anything.
Thx,
GD |
GD: You could be in for a word of pain. As a foreign income earner, you are REQUIRED to report in a timely manner. If you do not you become liable for your foreign-earned income as taxable just as if you earned it in the states.
I'd advise claiming that yer returns were "lost in the mails" if contacted. God knows how much more is!
From now on, use the 1040 or the "EZ" form (If you've got complicated taxes like mine, then it's the 1040 and a bunch of other property/investment-related forms!  ).
AND include the Form 2555 or 2555EZ (Christ! Why do 'mericans demand the "EZ" option? I guess that we're not done 'dumbing' ourselves down yet!) THIS is the CRUCIAL form that "proves" that yer income was derived from overseas sources and, therfore, eligible for the exemption.
Here's a hint: What you report is up to yer creative writing skills. The U.S. Gov't. has no way of verifiying what you report.
Good Luck!
NCTBA |
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Glenski
Joined: 15 Jan 2003
Posts: 12844
Location: Hokkaido, JAPAN
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| Posted: Fri Oct 02, 2009 8:03 am Post subject: |
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For publications, start here...
http://www.irs.gov/
http://www.irs.gov/businesses/small/article/0,,id=108326,00.html
...and otherwise contact your local embassy/consulate. They may be able to advise which forms are needed, as you are probably not the only person to neglect/ignore paying.
The site above has downloadable forms and tons of instructions (perhaps too many?).
If you owed taxes during that time, I'm sure you're aware that you should expect to pay interest and penalties.
http://www.irs.gov/taxtopics/tc653.html
If you didn't owe but simply didn't file, I'd guess that you have to pay "only" a penalty.
Good luck. |
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gaijinalways
Joined: 29 Nov 2005
Posts: 2279
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| Posted: Fri Oct 02, 2009 8:35 am Post subject: |
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| Don't worry about the time requirements (I have filed three years together twice), as long as you're below the Foreign Earned Income Exclusion (87,600), you'll owe no tax. There is one other form you may have to fill out, but I forget which one it is. Actually, you will need to file the 1040 to file the 2555, if I remember correctly. |
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naturegirl321
Joined: 04 May 2003
Posts: 9041
Location: home sweet home
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| Posted: Fri Oct 02, 2009 4:14 pm Post subject: |
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| gaijinalways wrote: |
| Don't worry about the time requirements (I have filed three years together twice), as long as you're below the Foreign Earned Income Exclusion (87,600), you'll owe no tax. There is one other form you may have to fill out, but I forget which one it is. Actually, you will need to file the 1040 to file the 2555, if I remember correctly. |
Only if you work for a company. If you're self employed, and make more than 400 usd, you STILL have to pay, the foreign income exclusino doesn't apply to this case. |
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denise
Joined: 23 Apr 2003
Posts: 3419
Location: finally home-ish
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| Posted: Fri Oct 02, 2009 5:04 pm Post subject: |
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You get a two-month extension (won't help much at this point, though...), but you've got to write a letter saying that you are eligible for it.
d |
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Glenski
Joined: 15 Jan 2003
Posts: 12844
Location: Hokkaido, JAPAN
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| Posted: Fri Oct 02, 2009 11:47 pm Post subject: |
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| naturegirl321 wrote: |
| gaijinalways wrote: |
| Don't worry about the time requirements (I have filed three years together twice), as long as you're below the Foreign Earned Income Exclusion (87,600), you'll owe no tax. There is one other form you may have to fill out, but I forget which one it is. Actually, you will need to file the 1040 to file the 2555, if I remember correctly. |
Only if you work for a company. If you're self employed, and make more than 400 usd, you STILL have to pay, the foreign income exclusino doesn't apply to this case. |
Could you quote a source for that? Everything I see on the IRS page says otherwise.
http://www.irs.gov/publications/p54/ch04.html#en_US_publink100047398
Who Qualifies for the Exclusions and the Deduction?
If you meet certain requirements, you may qualify for the foreign earned income and foreign housing exclusions and the foreign housing deduction.
If you are a U.S. citizen or a resident alien of the United States and you live abroad, you are taxed on your worldwide income. However, you may qualify to exclude from income up to $87,600 of your foreign earnings.
Requirements
To claim the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction, you must meet all three of the following requirements.
1.
Your tax home must be in a foreign country.
2.
You must have foreign earned income.
3.
You must be either:
1.
A U.S. citizen who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year,
2.
A U.S. resident alien who is a citizen or national of a country with which the United States has an income tax treaty in effect and who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year, or
3.
A U.S. citizen or a U.S. resident alien who is physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months.
Foreign Earned Income
To claim the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction, you must have foreign earned income.
Foreign earned income generally is income you receive for services you perform during a period in which you meet both of the following requirements.
*
Your tax home is in a foreign country.
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You meet either the bona fide residence test or the physical presence test.
To determine whether your tax home is in a foreign country, see Tax Home in Foreign Country, earlier. To determine whether you meet either the bona fide residence test or the physical presence test, see Bona Fide Residence Test and Physical Presence Test, earlier.
Foreign earned income does not include the following amounts.
*
The value of meals and lodging that you exclude from your income because it was furnished for the convenience of your employer.
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Pension or annuity payments you receive, including social security benefits (see Pensions and annuities, later).
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Pay you receive as an employee of the U.S. Government. (See U.S. Government Employees, later.)
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Amounts you include in your income because of your employer's contributions to a nonexempt employee trust or to a nonqualified annuity contract.
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Any unallowable moving expense deduction that you choose to recapture as explained under Moving Expense Attributable to Foreign Earnings in 2 Years in chapter 5.
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Payments you receive after the end of the tax year following the tax year in which you performed the services that earned the income.
Earned income. This is pay for personal services performed, such as wages, salaries, or professional fees. The list that follows classifies many types of income into three categories. The column headed Variable Income lists income that may fall into either the earned income category, the unearned income category, or partly into both. For more information on earned and unearned income, see Earned and Unearned Income, later. |
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GlobalDawg
Joined: 24 Jan 2003
Posts: 91
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| Posted: Sat Oct 03, 2009 12:52 pm Post subject: Back Tax Filings |
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Thanks bunches to all of you for the information you've provided. It's all valuable information and will save me the time of hunting through all the information that the IRS provides on their website. I initiated contact with the IRS last year and completed back taxes that I owed--before leaving the States--just last month. By no means was the experience a nightmare--we were mutually cooperative with one another. So now, I'm ready to clear up those years that I failed to file. I may have to pay penalties, but I never made more than the Foreign Earned Income Exclusion so there's no taxable income to pay. What I was looking for was information about the "other form" to file--the 2555.
The information you've provided gives me an idea of how to approach the matter. Since I don't have a few of the contracts to attach to the 1040EZ forms, I'll attach the 2555 form and provide photo copies of residence visas. Hopefully, this will be sufficient. Based on "gaijinalways" experience, I will submit them according to the years I worked for each company--that narrows it down to three.
Thanks ladies & gents,
GD |
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naturegirl321
Joined: 04 May 2003
Posts: 9041
Location: home sweet home
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| Posted: Sat Oct 03, 2009 12:57 pm Post subject: |
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| Glenski wrote: |
| naturegirl321 wrote: |
| Only if you work for a company. If you're self employed, and make more than 400 usd, you STILL have to pay, the foreign income exclusino doesn't apply to this case. |
Could you quote a source for that? Everything I see on the IRS page says otherwise.
http://www.irs.gov/publications/p54/ch04.html#en_US_publink100047398
Who Qualifies for the Exclusions and the Deduction? |
Yes, unfortunately, I can. Here's teh info about the $400 limit . http://www.irs.gov/businesses/small/article/0,,id=98846,00.html
Who Must Pay Self-Employment Tax?
If you are a self-employed U.S. citizen or resident, the rules for paying self-employment tax are generally the same whether you are living in the United States or abroad. The self-employment tax is a social security and Medicare tax on net earnings from self-employment. You must pay self-employment tax if your net earnings from self-employment are at least $400.
http://www.irs.gov/publications/p54/ch03.html . For 2008, the maximum amount of net earnings from self-employment that is subject to the social security portion of the tax is $102,000. All net earnings are subject to the Medicare portion of the tax.
The self employment tax goes on a certain part of the 1040, AFTER the foreign income exclusion. Basically the US wants you to pay tax SOMEWHERE. So if you teach privates in X country and don't pay taxes in X coutnry on the private classes, then you have to pay the US. |
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gaijinalways
Joined: 29 Nov 2005
Posts: 2279
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| Posted: Sun Oct 04, 2009 4:30 am Post subject: |
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GlobalDawg posted
| Quote: |
| The information you've provided gives me an idea of how to approach the matter. Since I don't have a few of the contracts to attach to the 1040EZ forms, I'll attach the 2555 form and provide photo copies of residence visas. Hopefully, this will be sufficient. Based on "gaijinalways" experience, I will submit them according to the years I worked for each company--that narrows it down to three. |
You need to submit a statement for each tax year. Don't worry if you have copies of income statements, do the best you can at submitting what you have. Though if you have your annual income tax statements issued in Japan (which you can pay for copies from your local government office if you don't), that would be fine if not better. Those forms are in Japanese mostly, but you can circle on the copies your income earned from each company.
That's what I've done, it's easier than submitting the copies from each company, though you could do that as well. But since you indicated you don't have some of the annual company income copies, the government copies are a suitable replacement. |
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Mr Magoo
Joined: 13 Aug 2009
Posts: 16
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| Posted: Sun Oct 18, 2009 9:23 am Post subject: |
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Er, you guys from the USA do know that the IRS is in fact illegal and not only was never ratified by an (inquorate) senate but is also breaking the 2nd amendment, yeah?
In a nutshell, you don't have to pay any IRS tax if you're an average joe. |
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gaijinalways
Joined: 29 Nov 2005
Posts: 2279
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fladude
Joined: 02 Feb 2009
Posts: 432
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| Posted: Sun Oct 18, 2009 6:46 pm Post subject: |
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If you are self employed, how would the IRS ever know what you made?
I think some of you are really hyper paranoid.
The IRS isn't sending out teams of troops in black helicopters to scour the earth for errant english teachers who are making 10-20 grand a year. If you don't have a half million bucks or more stashed in a bank someplace then I wouldn't worry about it.
And no your 12,000 dollar shack on the shores of the seas of Cambodia isn't going to send up a red flag......
And for your information, the self employment tax for social security, is OPTIONAL. It isn't required in the USA either if you are self employed.
However, if you don't pay it, then you don't get social security (at least not for that income period). Personally I would opt out of it since social security will be bankrupt pretty shortly (like the rest of the US Government).
Although having said that, if you get injured overseas, and the injury is permanent, having social security would have been a nice thing to have. I would look to see how much the social security tax is based on your income and then make a decision as to whether you want to participate or not. |
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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: Sun Oct 18, 2009 7:09 pm Post subject: |
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Fergit being self-employed! How does the I.R.S. know how much ANYONE foreign-employed makes? They hafta rely on what is reported as there are no W-2s issued except by U.S. employers.
If they EVER remove the foreign-earned exemption, can anyone guess how far south my reported income will be? Hah! They'll be lucky if I tell them anything more than I chose the life of a subsistance goat-herder.
Good luck, Uncle Sam!
NCTBA |
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johnslat
Joined: 21 Jan 2003
Posts: 13859
Location: Santa Fe, New Mexico, USA
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| Posted: Sun Oct 18, 2009 7:13 pm Post subject: |
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Dear NCTBA,
" . . . I chose the life of a subsistance goat-herder."
Good career move, NCTBA. Shorter hours, less work, and better pay than being an ESL/EFL teacher. Moreover, the clients are much nicer and easier to handle.
Just don't let anyone get your goat(s.)
Regards,
John |
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