Accountants Who Come To Us For Guidance
David M. Kaufmann, CPA
2831 Wyecliff Way
Highlands Ranch, CO 80126
PO Box 632285
Highlands Ranch, CO 80163-2285
US Income Tax Consequence Of Being An Expatriate
There are broad tax consequences for working abroad:
- The Foreign Earned Income Exclusion might eliminate
some or all of your expatriate income from you 1040 Form.
- The Foreign Housing Cost Exclusion might reduce a
portion of employer paid housing expenses.
- Extension for filing income tax returns
Foreign Earned Income Exclusion
For 2003 taxes, the maximum Foreign Earned Income Exclusion
If you qualify for this exclusion, you would need to include
an election in your tax return and file either Form 2555 or Form 2555 EZ.
Your "tax home" must be outside the US. However, you family
can still reside in the US.
You must meet the bona fide foreign residence test or the
foreign physical presence test.
If you qualify for the Foreign Earned Income Exclusion,
you can stop US tax withholding by filing Form 673 with your employer.
Foreign Housing Cost Exclusion
Some or all your employer paid foreign housing costs may be
excluded from US income tax.
Housing costs include reasonable, but not "extravagant"
costs. Housing costs could include rent, insurance, the fair rental value of
housing, utilities, etc.
There might be limits on the Foreign Housing Cost Exclusion.
This limit could change.
Extended Filing Deadlines For Returns With The Foreign Earned
Generally, for taxpayers that qualify, the filing due date
for expatriate returns that qualify for the Foreign Earned Income Exclusion is
File IRS Form 2350 to request the extended deadline.
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