Bryan Kellar wrote:
- quote -

Note also that the Foreign Earned Income Exclusion, if it
applies, may reduce the amount actually taxed to zero.

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Mexico requires its employers to withhold about 30% in
income tax on all employees regardless of residence or
citizenship. Some of the difference may be withholding. In
that case the T/P can claim a foreign tax credit or deduct
the taxes withheld. Check with the employer.

Linda Dorfmont E.A., CFP, CSA

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"Ken B. Winger" <kbwing[at]comcast.net> wrote:

- quote -

No, he earned $30,000.

- quote -

I vote for C. If he earned US$30,000 in 2004, then he needs
to report US$30,000.

If the statement is not a US Form W-2, then it does not need
to be attached to the tax return. He should keep for his
records the statement and an accounting of how he came to
the $30k figure.

Bryan
------------------------ Bryan Kellar, EA
Oregon Tax Help, Inc. -- Portland, Oregon
www.oregontaxhelp.com
www.canadatax.org

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T/P (US resident) earned in 2004 approximately 30k Gross per
his knowledge for commissions who worked and lived in Mexico
and is employed by Mexican resort company in 2004. The
statement his employer sent him shows only 12k in Spanish
for 2004. There are no other records in his possession.

What would be the proper way to handle this on his 2004 tax
return:

A. Report the 30k, attach the 12k stmt, and add a note
explaining the difference in which T/P was told Mexican ER's
only report 12k per year. This was the explanation I rec'd
from T/P.

B. Report the 12k and attach the 12k stmt.

C. Report the 30k and do not include any statement.

Note: Whether he reports the 30k or 12k will make no
difference on his amount due since he is eligible to exclude
up to 80k.

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