Barney Byrd wrote:

- quote -

In general, this is true but does not completely cover the
possibilities. For example, if you move abroad at some time
during the year, you can still qualify for bona fide
residence for that year. You must wait until after the
following year, however. Once you meet the full tax year
residency rule, the qualification can be applied
retroactively to the beginning of the residency period.
Thus, after the second tax year, you can amend the first
year return to claim bona fide residence. This can be
helpful for a taxpayer who travels frequently and cannot
meet the 330 day rule.

- quote -

Why? Am I any less qualified to represent my clients
because I have moved my practice to Thailand? It may be
more convenient to find a qualified practitioner in or near
the foreign place of residence.

Lanny K. Williams, CPA
Nawarat, Williams & Co
Income Tax Services for Expatriate Americans

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jtc wrote:

- quote -

Only if your income is under the filing thresholds. Note
that such is not the same condition as having a zero total
tax on the return document (which may happen after the
foreign earned income exclusion is applied). To claim the
exclusion, one must file.

- quote -

Depends on the state. Some states define abandonment of
residency as establishment of residency in another state -
and omit residency in another country.

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"jtc" <jtamchay[at]yahoo.com> wrote:

- quote -

Your assumption is unwarranted. Many states define a
resident for income tax purposes to include all persons
domiciled in the state, even if they are not present in the
state at any time during the taxable year. Further, states
generally take a dim view of attempts to establish a new
domicile in a foreign country.

In order to change your domicile, you generally must (a)
leave your previous domicile and sever all or most of your
ties to it; (b) move to and reside in a new location; and
(c) intend to remain in the new location permanently. Most
states will argue that even if you have met (a) and (b), you
probably do not meet (c) because Americans generally intend
to return to the U.S. eventually.

Some states have a "safe harbor" for expatriate employees.
For example, in New York a domiciliary is a nonresident if,
during any 548-day (18 month) period, he or she is present
in a foreign country for at least 450 days and is not
present in New York for more than 90 days. The exception
does not apply if the taxpayer maintains a place of abode in
New York where his or her spouse (unless legally separated)
and children reside. In California, a person domiciled in
the state who is absent (in a foreign country or elsewhere)
on an employment-related contract for an uninterrupted
period of at least 18 months is presumed to be a
nonresident, as long as he or she is not present in
California for more than 45 days during a taxable year. This
exception doesn't apply if the taxpayer has more than
$200,000 of income from intangible assets or if the move is
determined to have been made for the principal purpose of
tax avoidance.

If you do not meet one of these safe harbor rules, you may
be subject to state tax on all of your income, from all
worldwide sources, during your absence. Some states conform
to the $80,000 IRC Sec. 911 exclusion for foreign earned
income, while others do not.

Katie in San Diego

The foregoing is intended for educational purposes only and
does not constitute legal or professional advice.

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"jtc" <jtamchay[at]yahoo.com> wrote:

- quote -

U.S. citizens and legal residents are taxed on their
worldwide incomes. Living abroad does not emancipate you
from having to file a tax return, federal or state.
However, if you qualify, you may be eligible to exclude up
to $80,000 of foreign earned income. The exclusion to which
I'm referring is known formally as the foreign earned income
exclusion (FEIE) and is claimed on IRS Form 2555 which must
be attached for your federal income tax return. In general,
you must live and work abroad for an entire tax year (Jan 1
- Dec 31) or for any period of 330 days within a continuous
360 period (even if spans two tax years). If you reside
abroad for a full tax year, you will qualify under the
bonified residence test. The alternative qualifying test
(the 330-day period) is known as the physical presence test.

Further details are available in IRS Publications 593 and 54.

http://www.irs.gov/pub/irs-pdf/p593.pdf

http://www.irs.gov/pub/irs-pdf/p54.pdf

If you actually do decide to take a job overseas, once in
place I recommend you report your address change to IRS on
Form 8822. The form can be faxed to the IRS Philadelphia
Service Center at (215) 516-2555. I also think it's a good
idea to engage a tax professional before you depart for an
overseas job. The tax pro may ask you sign an IRS power of
attorney so that he or she can deal with IRS on your behalf
regarding any tax matters that may arise while you are out
of the country.

http://www.irs.gov/pub/irs-pdf/f8822.pdf

Barney Byrd

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jtc" <jtamchay[at]yahoo.com> wrote:

- quote -

Once you are no longer a US citizen or resident alien.

The US taxes the worldwide income of any US citizen or
resident alien. You may be able to exclude some of that
income from double taxation through the foreign earned
income exclusion or tax treaties.

If you no longer have domicile in any US state, you would be
free of state taxes. But be prepared for the last state
where you had domicile to claim that you are still a
resident.

--
Chris Green

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"jtc" <jtamchay[at]yahoo.com> wrote:

- quote -

No such thing. Under certain conditions you may not pay tax
on that money but it is still reportable and must be shown
to be exempt on Form 2555.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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- quote -

Assuming you are US citizen or resident, you are not free
from filing. You may be able to exclude from gross income
certain foreign earned income and housing or you may be
eligible for a foreign tax credit; but you are still going
to have to file. See IRS Pub 54 US Tax Guide for Citizens
and Residents Abroad:
http://www.irs.gov/publications/index.html

- quote -

Whether or not you have to file state income tax depends
upon your state law and the facts and circumstances
surrounding your overseas assignment. The mere fact that
you may have sold your home and moved overseas does not mean
that the state now treats you as a nonresident.

--
Alan
http://taxtopics.net

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"jtc" <jtamchay[at]yahoo.com> wrote

- quote -

First there is the foreign income exclusion, it is on the
first $80,000 of foreign earned income (basically wages).
See Code Section 911.

There are two tests, the foreign residence test, and the
foreign presence test. You have to pass at least one of
these (so study hard). Presence = You must be a resideent
of the foreign country for an uninterrupted calander year..
Presence = for any 12 month period be present in the foreign
country for 330 full days. This means physical presence, so
count the days carefully and don't be close.

- quote -

State laws vary, so check with whatever state you think is
your "home state" about their laws.

--
Paul A. Thomas, CPA
Athens, Georgia
taxman at negia.net

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Under what circumstances are you free from filing federal
income taxes on your income solely earned in a foreign
country.

I am assuming that you would also not be filing a state
return as you are currently living outside the US and have
no legal US residence.

Thanks in advance.

--
jtc

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