Usa Expat Taxes Question

[BlueEasySleep]

I am employed by a US company and do a little work over the internet.

I've read that those who have not been in the US more than 30 days in the calendar year do not need to pay federal income taxes.

Is that true? Anyone actually successfully done that before?

I don't want to get myself in any trouble, but don't want to pay US taxes if I don't live there and don't need to.

[hkt83100]

Remember: Even if you do only minor work online for a company out of the country you will still need a work permit. This was mentioned a few days ago in the Q&A section of a publication in Phuket.

More here: http://www.phuketgazette.net/issuesanswers/details.asp?id=1175

Reason for edit: Link added.

Edited December 12, 2010 by hkt83100

[Langsuan Man]

Sorry the 30 day part is wrong

1. A U.S. citizen who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year, or

2. A U.S. resident alien who is a citizen or national of a country with which the United States has an income tax treaty in effect and who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year, or

3. A U.S. citizen or a U.S. resident alien who is physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months.

[lanny]

Not quite! The quote by LangsuanMan tells why. But, nobody had said that you still need to file a tax return to claim the exemption. For 2009, up to $90,400 could be excluded under either the bona fide resident rule or the physical presence rule. This exclusion is not automatic and you have to tell IRS that you qualify under either rule.

The basic rule is that all world-wide income of a US citizen or permanent resident is subject to income tax. The exclusion for foreign earned income is an exception in the law (and could be taken away.) If you pay Thai income tax, however, you are entitled to a credit against US tax for at least part of the Thai tax. (This cannot be taken away by Congress as it is a provision of the Thai-US tax treaty.)

[Smokin Joe]

get IRS Form 2555 from their website (get the EZ version). It explains it very well. It's pretty simple to file. I've done it during years I qualified.

Ignore the post about needing a work permit. The folks go on about that also would say you need one to trim your own fingernails or do your own laundry as they also meet the definition of "work".

[grumpyoldman]

get IRS Form 2555 from their website (get the EZ version). It explains it very well. It's pretty simple to file. I've done it during years I qualified.

Ignore the post about needing a work permit. The folks go on about that also would say you need one to trim your own fingernails or do your own laundry as they also meet the definition of "work".

I second this.

Typical of the posters here to change the topic, unless I misunderstood you and you were asking about a work permit matter? Not.

[BlueEasySleep]

Typical of the posters here to change the topic, unless I misunderstood you and you were asking about a work permit matter? Not.

I was asking about US tax law, not about thai visas.

1. A U.S. citizen who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year, or

2. A U.S. resident alien who is a citizen or national of a country with which the United States has an income tax treaty in effect and who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year, or

3. A U.S. citizen or a U.S. resident alien who is physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months.

This is what I was referring to when making the thread.

Looking at IRS Form 2555. Would I qualify for this if the company is American? Is it only for federal taxes?

[Smokin Joe]

I was asking about US tax law, not about thai visas.

Looking at IRS Form 2555. Would I qualify for this if the company is American? Is it only for federal taxes?

Yes, every time I used the exemption and filed form 2555 I was working for US companies.

[BlueEasySleep]

And what happened? It exempted you from federal taxes (up to 90K or whatever it is)?

Good news

[Smokin Joe]

And what happened? It exempted you from federal taxes (up to 90K or whatever it is)?

Good news

Yes. The exempt income was excluded from the adjusted gross income (AGI) that is used to figure final tax due. Since tax was being deducted at the same rate as if I was in the states it resulted in a 27k USD refund one year. If you have to do a state return also it will probably indirectly apply there also if the state uses your federal AGI to figure their tax.

I heard a rumour that I haven't confirmed that a change has (or may be )made that will tax what remains at the rate of the higher figure as if it wasn't exempted. for example - you make 100k overseas, if 90k was exempt you only would pay tax on 10k but the tax rate would be at the 100k level. Still a good deal and like I said I don't know if it is actually a change or not. You would need to go to the 2010 form 1040 to verify that.

P.S. If Lanny replies again I believe he is actually a tax professional so any advice he gives is probably the correct info if it is different that anything I or others post.

[BlueEasySleep]

Well that's great to hear. Thanks for the info.

[xjessie007]

Here is another great thread about the same topic:

http://www.thaivisa.com/forum/topic/245683-us-citizensfederalincome-tax/page__p__2558841__hl__federal+tax+return+1040__fromsearch__1#entry2558841