|
Posted by L K Williams on April 10, 2008, 8:19 am
Please log in for more thread options
wrote:
>For 2007, I lived exactly the first 6 months of the year in a foreign
>country. My home was there. My family was there. I had a job as
>proteomics supervisor there for the past 3 years (yes, from mid-2004 to
>mid-2007). My salary was paid by the foreign university, and I paid taxes
>(income and others) to the foreign country.
>
>
>So in mid-2007 I am back in the U.S., getting a job here and working for
>the last half-year here. Although my wife and daughter remain back in my
>wife's native country, I am here for good.
>
>So here's what I think: my tax home was there for the first half of 2007
>but back in the U.S. for the last half of 2007.
>
>I should not have to pay U.S. income tax on income earned and taxed by a
>foreign employer and foreign country. It should be excluded from my
>income tax computation. But I should pay tax on U.S. income I earned in
>my new tax home in the U.S.
>
>But Form 2555 is NOT AT ALL clear in its instructions OR its examples. I
>called the IRS and its expert said I met the physical presence test, but I
>am still not clear about the tax home!
>
>Anyone else want to offer an opinion? The tax software seems to offer no
>opinion. And 1-800-829-1040 answered questions in a way that only
>generated more questions.
Your tax home for the first half of 2007 was the foreign country. You
changed to a new tax home when you returned to the US for the last
half of the year. If you were in the foreign country exactly 1/2 of
the year, you may exclude up to $42,750 on Form 2555. If you earned
more than this in the foreign country, you will have to pay US tax on
the excess but you may claim a credit for any foreign income tax paid
on the excess.
If, as it would seem, you qualified as a bona fide resident for 2006,
you also qualify as a bona fide resident for 2007. You do not need to
meet the physical presence rules; the residency status continues until
you abandon it.
Lanny K. Williams, CPA
Nawarat, Williams & Co., Ltd.
Income Tax Services for Expatriate Americans
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
| 
Yahoo! 
Google 
Windows Live 
del.icio.us 
digg 
Netscape 
XML Sitemap