<nguyenduchieu2[at]yahoo.com> wrote:

- quote -

You do not say if you retained your U.S. residence status.
If you surrendered your greencard, you ceased to be subject
to U.S;. income taxes when you did so. Your source of
income is where you work, not where your client makes
payment to you. So, you should not include the portion of
the income earned after you left the U.S. in taxable income.
In this case, you need to file as a part-year resident.

However, because IRS received the 1099, they will be looking
for gross income of at least that amount on your return.
You should include the entire amount as receipts on Schedule
C and back out the foreign portion as a discount or
miscellaneous expense.

You could go the Form 2555 route but be aware that this adds
complications. The exclusion applies to gross income, not
the net from Schedule C. So, in calculating the exclusion,
you must make an adjustment on Form 2555 for the portion of
your expenses that applies to the excluded income. Thus,
you cannot simply multiply the amount on the 1099 by the
120/365 ratio. That is only the first step. You must also
apply this ratio to the total of expenses claimed on
Schedule C and reduce the exclusion by this amount.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

I'm still trying to figure out my 2002 taxes but I filed for
an extension and refuse to follow my former accountant's
rule of paying as much as possible to the IRS. My tax
situation is complex and pub.54 amoungst other are not
helping...

Until 2002 I lived in the US, earning money as an
independent consultant, working from home. My employers,
based in a different city in the US paid me on a 1099 basis
and I filed estimated taxes/schedule C/+SE tax. Very
straight-forward.

Summer of last year I moved overseas back to my home
country. I moved with the intention of being away for an
indefinite period of time and by any definition you could
consider the move "permanent". But I continued to work on a
1099 basis for the company in the US.

So now I ponder publication 54 and form 2555. My "tax home"
has been outside the US for over 12 months now and I want to
claim some of my income as "foreign earned income". If I was
payed by a foreign employer the determination would be
simple, I would multiply 120 days (# of days in 2002 that I
had my tax home outside the US) by 80,000. The problem is
that this was a US company that paid me the money on a
contractor basis and then reported it to the IRS under my
SSN at year end.

I work as a computer programmer and my residence is my
office and regular "place of business". Adding to the
problem is that my country of birth is vietnam, they are
still trying to figure out what "tax" is, so they are a long
way from any sort of "treaty" with the US.

I figure I can just pay every possible penny to the IRS
(again!!) or claim "foreign earned income" and gaurantee an
audit. Any ideas? I'm lost

-Hieu

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->