Taxes

Pappassito (☼Travelguide writer) says on Jul 27, 2009, 14:15:

cstew47 says on Jul 27, 2009, 15:09:

Besides the fact that this is off topic for this forum, you need to at least research your question in the IRS website or ask a professional.

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marlydog1812 says on Jul 27, 2009, 16:19:

why is this off topic??
Im an American living in Colombia..
I figure the are many other people who are employed in this country that have had this issue.
This is a site for expats living in Colombia, right???

Im sure someone here can tell what they did when their sole income was earned while working in Colombia.

Just some basic info dude no need to to a tool

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cstew47 says on Jul 27, 2009, 17:24:

Sorry, your post said nothing about living in Colombia. It was a general tax question seemingly from a person living in the US. You need to be more specific if you want an intelligent response.

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Pappassito (☼Travelguide writer) says on Jul 27, 2009, 17:32:

marlydog1812 says on Jul 27, 2009, 18:22:

Okay I guess I wasnt clear....sorry if I was a little snippy....

Ive used this site for six months and have gotten great results. I found if I ask a general question I can do more in depth research afterwards to save time. Anyway Ill talk to a pro in the states. Thanks for your suggestions...

Wait the one guy who told me to use JJ logistics really jacked me up.....but other then that great site!!!

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Miguel_Clavo says on Jul 27, 2009, 18:28:

youi need to file in order to claim the exemption. And if you have earned income above a certain amount, you still have to file a return. if you dont, they bone you. suerte.

RVW orderded me to remove my tagline congratulating the PBH Mods New Golden Boys. Lame.

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marlydog1812 says on Jul 27, 2009, 19:35:

thanks Clavo...that was the info I needed....

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offshoreadvisor2009 says on Jul 27, 2009, 20:23:

Last I read we are exempt of taxes in the US for the 1st 80k of usd income if you are out of the us enough of the year to qualify as xpat.

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Miguel_Clavo says on Jul 27, 2009, 20:32:

i believe it is 87,500 for 2009 but i could be off a little. either way you have to file to claim it for earned income. most, if not all, pensions are not earned income.

RVW orderded me to remove my tagline congratulating the PBH Mods New Golden Boys. Lame.

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Gator says on Jul 28, 2009, 08:35:

It MUST be earned income not passive income,

In order for you to claim the foreign earned income exclusion, the IRS states that a taxpayer must have foreign earned income and his tax home that must be in a foreign country and the taxpayer must be one of the following:

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.

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

"Bene, cum Latine nescias, nolo manus meas in te maculare" .

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marlydog1812 says on Jul 28, 2009, 13:59:

gator thanks I made way under 89 grand was a resident of Honduras for the whole year....I got nothing from my employer at all to verify my income. So Im assuming I just do the taxes take the exemption with no supporting paperwork...

thanks for your info

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Miguel_Clavo says on Jul 28, 2009, 14:50:

Gator, correct me if i am wrong, but the foreign income exclusion is where you can exclude up to that tax years limit, which i believe is close to 87,500 for 2009, only that income which is earned in the foreign country, but in your home country all of your earned income is still taxable. Lots of people think that if they are outside of the country for more than 330 days that the exclusion applies to their US earned income, but it doesnt work that way, as i understand it.

Your thoughts?

RVW orderded me to remove my tagline congratulating the PBH Mods New Golden Boys. Lame.

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briarblue says on Jul 28, 2009, 23:21:

Below is a copy-n-paste from a response I provided several months ago on this forum.about the foreign earned income exclusion. I apologize in advance for not having the tme to provide you on-point answers pertinent to your own particular fact situation (although this is no reflection on you, the last time I provided on-point answers with authoritative cites, I didn't even get a "thank you" from the person soliticing information, lol).

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If you meet certain tests, you can elect the “foreign earned income exclusion,” subject to limitations. The election is made by completing Form 2555 or Form 2555 EZ and attaching it to your return for the first tax year that you want the election to be effective. To qualify for the election, you must satisfy the following requirements.

First, you must have a “tax home” in a foreign country. This means your main place of business or employment must be in a foreign country on either a permanent or indefinite basis. Your “family” home can still be in the U.S. If your foreign assignment is merely temporary, you will not qualify for the exclusion. However, lodging and meals expenses of a temporary assignment can be deductible travel expenses. It will not be considered temporary, however, if it's for more than a year.

Next, while having the above tax home, you must either meet the bona fide foreign residence test or the foreign physical presence test.

To meet the bona fide foreign residence test, you must be a bona fide resident of one or more foreign countries for an uninterrupted period fully covering at least one tax year (e.g., Jan. through Dec. if, like most individuals, you're a calendar year taxpayer). Broadly speaking, you're a bona fide resident if you have the intention to live there for the time being. You can still intend to return to live in the U.S. eventually. Also, temporary brief trips back for vacation or business will not cause you to fail this test.

For the physical presence test, you must be physically present in a foreign country for 330 full days during a period of 12 consecutive months. For this test, the months do not have to cover an entire tax year—they can run, for example, from April through March.

If you qualify under the above tests, you can exclude from income the amount of your foreign earned income, up to a maximum of $91,400 for tax year 2009 ($87,600 for tax year 2008). The limitation is computed on a daily basis if you do not satisfy the tests for the entire year. If both you and your spouse qualify, an exclusion is separately determined for each of you.

Income paid by the U.S. government to its employees and income received as a pension, annuity, or social security benefit is not included in foreign earned income.

Note that the foreign earned income exclusion is elective, not automatic. If you elect to take advantage of the exclusion, you cannot also claim a tax credit for taxes paid to a foreign country allocable to the excluded income. Thus, in some cases you will have to compare the tax savings of the exclusion with those of a credit.

If your employer covers all or part of your foreign housing costs you may also qualify for a foreign housing cost exclusion. (In some cases, however, this may reduce your foreign earned income exclusion.)

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marlydog1812 says on Jul 29, 2009, 07:55:

thanks man!!!! this helps a lot Briarblu...

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