I work out of the country, and get paid in cash each month. Do I need to file taxes?

Question

I only went to the states once this year for less than 30 days. I am single, and do not send money into the states. I make much more than the 80k cap. What should I do.

Answer 1

If you do not owe any US taxes, even though you may be a US citizen or permanent resident you are not obliged to file a tax return. On the other hand, if you don't file the statute of limitations will never run and you must keep your proof of earnings and zero tax calculation forever.

You may not owe tax because of the foreign earned income exclusion and foreign housing and education allowances: http://www.irs.gov/businesses/small/international/article/0,,id=97130,00.html Unfortunately, in one of many stealth taxes enacted by Congress last year was introduction of progressive tax bracket application from the first dollar of earned income, whether exempted or not. Also, if the IRS finds you before you declare your foreign income, the foreign earned income exclusion may possibly be denied. Of course if you pay heavy taxes in the country where you are you are unlikely to owe tax in the USA: see Form 1116.

Of course if you also have a foreign passport you can do what Marc Rich did: stay abroad. Even with his pardon he can't visit the USA without being charged by NY State with tax evasion, and being sued civilly for unpaid tax and penalties. But now he is unlikely to be extradited (he was also pardoned for his Iran-sanctions-busting activity) since tax debts are not recognized abroad, except by Canada and in certain cases Sweden.

You don't say what country you're in. If you are self-employed or work for a US firm then you are subject to US social security in the absence of a totalization agreement with the country where you live. That means you owe FICA/SET, roughly 16% of earnings. http://www.irs.gov/businesses/small/international/article/0,,id=105254,00.html

Answer 2

You do have a legal obligation to pay tax if you are a US citizen or green card holder. You should seek out a first-class tax advisor who is familiar with US taxes, including procedures for dealing with criminal investigations. You are at serious risk of prosecution, and there is no statute of limitations on tax liability on unfiled returns.

Answer 3

Technically you need to file but practically most people would not. Downside is you get no earnings credit for social security when you retire. If you are selling drugs you won't live that long anyway.

Answer 4

im not a dishonest person, but if you are getting paid cash in hand .. matey ... SHHHHHHHHHHH dont say anything...
just keep posting it home ...
each month ...
if you are not on the books then dont say nada..

am i wrong for encouraging you?

Answer 5

yes