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David M. Kaufmann, CPA
7200 S. Alton Way,
Suite B-195
Centennial, CO 80112
Voice: 720.493.4804
(toll-free) 800.326.6686
Fax: 303.796.7768
(toll-free) 888.326.6686
Email:
contact2@kaufmann-cpa.com |
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
is $80,000.
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
Income Exclusion
Generally, for taxpayers that qualify, the filing due date
for expatriate returns that qualify for the Foreign Earned Income Exclusion is
June 30.
File IRS Form 2350 to request the extended deadline.
For questions:
"contact AT kaufmann-cpa.com" |