American Taxes in Colombia

dwr says on Mar 27, 2008, 06:22:

Do you fill out the Tax Exempt Form each year that allows you to earn tax free up to 82,000 if you live outside the US?

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bogotabrian says on Mar 27, 2008, 07:08:

Can you fill out this form AT tax time or before?

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Gator says on Mar 27, 2008, 07:41:

No, you cannot

The tax free earning, which is not 87,000 not 82,000, only applies to earned income. This is income from pay for personal services performed, such as wages, salaries, or professional fees. Foreign earned income is income you receive for services you perform in a foreign country during a period when your tax home is in a foreign country and during which time you meet either the bona fide residence test or the physical presence test. It does not matter whether earned income is paid by a U.S. employer or a foreign employer. Generally, you can take either a deduction or a tax credit for foreign income taxes taxes you pay.

This is a complicated situation(I've been there) and I STRONGLY suggest you consult a CPA in the USA.

"Credidi pretio parvo emere et magno vendere tibi in animo fuisse!" .

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dwr says on Mar 27, 2008, 07:41:

you fill out form 2555 and then enter it as a negative amount in Other Income line on the 1040 and there is your exemption. You submit the 1040 and 2555 at tax time.

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tlextoo says on Mar 27, 2008, 07:41:

I was educated in accounting and passed the CPA exam years ago and have not practiced as such for years so do not take this as more than insight. The tax laws related to mortgage interest and property taxes were written and are preserved to principally a) support the housing lobby and b) continue the myth of the American Dream. I am guessing that interest and taxes on a house on Colombia don't qualify....like I said, just insight and not a professional opinion. Same with the taxes on a car.

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larryrn says on Mar 27, 2008, 08:47:

I have a LLC in America and use Turbo Tax. I pay myself a salary and deduct FICA/Federal/SS/SUTA and FUTA. I have a house and pay taxes in Florida but will be selling the house in Florida. If I have FICA/Federal/SS/SUTA and FUTA deducted and paid by my company even though I spend 80 percent of my time in Colombia -- If I buy a house in Envigago and can not write off any taxes or interest on the morgage?

--- Larry Snyder - http://www.rn.org - Your Source for Online Nursing Education!

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tlextoo says on Mar 27, 2008, 09:41:

Read disclaimer above and add to it, I never was a tax practitioner. When I get a chance I will do some research or check out the irs website which MAY give some guidance. If you are using your house in Florida for business and taking a business rental deduction, that is a different kettle of fish, as you likely know. I honestly don't know if Colombia works or not. I'm just using a touch of knowledge as to why tax laws are created. You might actually call the IRS, since it is a freebie, though your time waiting and listening to the same recording over and over telling you to hold, might not be time effective. I have generally found them to be pleasant and helpful. At least that would give you the 'official' answer.....maybe.

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bogotabrian says on Mar 27, 2008, 10:02:

Thanks DWR.

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dwr says on Mar 27, 2008, 10:06:

I believe you also have 3 months grace time to file compared to those living in the U.S.

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