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Posted by Alex on June 28, 2008, 5:51 pm
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Greetings,
I started working as an expatriat for the US government agency on
February 1 this year. I was on vacation in the US for 21 days,
including the flying time to and from the country. I realize that in
order to claim the tax exemption on first $80,000 or so of the gross
income I have to be outside of the US for at least 330 days. My
question is, how this time is counted - from January till December,
that is, during the tax year, or from the time I started my
employment - in such a case, from February 1 this year till February 1
next year?
If the first rule is true, then it seems I won't be able to claim the
tax relief, since I was home the whole month of January, even though I
did not work at that time, as I was busy preparing for my departure,
plus my vacation time, which overally exceeds 35 days.
If the second rule is true, it seems that I still may come home for
another vacation to be eligible, as long as the total time in the US
from February 1 till February 1 next year does not exceed 35 days.
My wife is working in the US while I'm overseas. Can we file a joint
return and I can still be eligible for the tax relief?
How can I prove to the IRS, in case of an audit, that I really was out
of the country for the required period of time? Entry/exit stamps in
the passport? In this a case someone who has his passport stolen and
replaced (such things unfortunately do happen) cannot claim the tax
relief for that year?
Thanks in advance,
Alex
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Posted by L K Williams on June 28, 2008, 6:28 pm
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>Greetings,
>
>I started working as an expatriat for the US government agency on
>February 1 this year. I was on vacation in the US for 21 days,
>including the flying time to and from the country. I realize that in
>order to claim the tax exemption on first $80,000 or so of the gross
>income I have to be outside of the US for at least 330 days. My
>question is, how this time is counted - from January till December,
>that is, during the tax year, or from the time I started my
>employment - in such a case, from February 1 this year till February 1
>next year?
>
>If the first rule is true, then it seems I won't be able to claim the
>tax relief, since I was home the whole month of January, even though I
>did not work at that time, as I was busy preparing for my departure,
>plus my vacation time, which overally exceeds 35 days.
>
>If the second rule is true, it seems that I still may come home for
>another vacation to be eligible, as long as the total time in the US
>from February 1 till February 1 next year does not exceed 35 days.
>
>My wife is working in the US while I'm overseas. Can we file a joint
>return and I can still be eligible for the tax relief?
>
>How can I prove to the IRS, in case of an audit, that I really was out
>of the country for the required period of time? Entry/exit stamps in
>the passport? In this a case someone who has his passport stolen and
>replaced (such things unfortunately do happen) cannot claim the tax
>relief for that year?
>
>Thanks in advance,
>
>Alex
I hate to be a spoil sport, but the first sentence of your post
indicates that you are not eligible for the exclusion. If you are an
employee of the US government, the foreign earned income exclusion is
not available to you. Only non-government people qualify. If you are
an independent contractor, then you would be OK buy you would still
owe self-employment tax on your earnings.
The rule on physical presence is that you must be physically present
in one or more foreign countries for 335 days out of any 12-month
period. Note that phrasing - any 12-month period. So, in your case,
the maximum exclusion would be 11/12 of $86,400 for one year and 1/12
for the second year. You claim the exclusion on two tax returns.
The exclusion is individual, not joint, so you qualify even if your
spouse does not.
Lanny K. Williams, CPA
Nawarat, Williams & Co., Ltd.
Income Tax Services for Expatriate Americans
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<< ------------------------------------------------------- >>
<< 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. >>
<< ------------------------------------------------------- >>
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Posted by John Levine on June 28, 2008, 11:53 pm
Please log in for more thread options >The rule on physical presence is that you must be physically present
>in one or more foreign countries for 335 days out of any 12-month
>period. Note that phrasing - any 12-month period. So, in your case,
>the maximum exclusion would be 11/12 of $86,400 for one year and 1/12
>for the second year. You claim the exclusion on two tax returns.
Can you claim the exclusion if you expect to be away for 335 days? I
currently live in the US but expect to move to another country around
September 1, and don't expect to be spending 30 days/yr in the US.
When I file my 2008 taxes, can I claim the exclusion for 4/12 of 2008
even though I haven't been out of the country for 330 days yet?
R's,
John
--
<< ------------------------------------------------------- >>
<< 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. >>
<< ------------------------------------------------------- >>
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Posted by L K Williams on June 29, 2008, 12:51 am
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>>The rule on physical presence is that you must be physically present
>>in one or more foreign countries for 335 days out of any 12-month
>>period. Note that phrasing - any 12-month period. So, in your case,
>>the maximum exclusion would be 11/12 of $86,400 for one year and 1/12
>>for the second year. You claim the exclusion on two tax returns.
>
>Can you claim the exclusion if you expect to be away for 335 days? I
>currently live in the US but expect to move to another country around
>September 1, and don't expect to be spending 30 days/yr in the US.
>
>When I file my 2008 taxes, can I claim the exclusion for 4/12 of 2008
>even though I haven't been out of the country for 330 days yet?
>
>R's,
>John
No, you cannot claim the exclusion based on expectation. If you file
your return, claiming the exclusion before you qualify, IRS will
disallow the exclusion and assess the additional tax. You can request
an extension good until 30 days after you expect to qualify or file
your return without the exclusion and then amend it when you do.
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. >>
<< ------------------------------------------------------- >>
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Posted by removeps-groups@yahoo.com on July 1, 2008, 12:19 pm
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> The rule on physical presence is that you must be physically present
> in one or more foreign countries for 335 days out of any 12-month
> period. Note that phrasing - any 12-month period. So, in your case,
> the maximum exclusion would be 11/12 of $86,400 for one year and 1/12
> for the second year. You claim the exclusion on two tax returns.
If he's out of the country for all of 2009 as well, does get get to
claim only 1/12 or 100% of the 2009 annual exclusion?
--
<< ------------------------------------------------------- >>
<< 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. >>
<< ------------------------------------------------------- >>
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