I work outside the country part-time as an ESL teacher. I make about 9,000 USD per year. Do I need to file a return? If so, can I still file a 2005 return late?
2007-01-03 08:05:44 · 4 answers · asked by Darcy D 1 in Business & Finance ➔ Taxes ➔ United States
If you are a US citizen or US green card holder, you are still subject to US federal income tax even though you live and work outside the US. You can file your 2005 tax return late. If there is tax due, then the IRS will assess late filing and late payment penalties and interest on the tax due. If your tax home is outside of the US, then you may qualify for the earned income exclusion, which allows you to elect to exclude the first $80,000 of income earned outside the US from being taxed by the US.
You mentioned that you are working outside the country part-time, but did not mention whether you are living outside the country part-time as well. In order to exclude the foreign income, you must either have a tax home (this is generally defined as not just residing outside of the US, but also being subject to tax in the country in which you are residing) out of the US for either a complete US tax year (January 1 - December 31) or be physically present outside of the US for at least 330 days out of 365. If you are living part-time outside of the US and you do not meet either of these two conditions, then you would not qualify for the foreign earned income exclusion and would have to pay tax on the $9,000 you earned.
2007-01-03 08:11:50 · answer #1 · answered by jseah114 6 · 0⤊ 0⤋
Yes, US citizens must report all income from all sources, world wide.
Some foreign earned income may be excludable or you can take a credit for the foreign income taxes paid. Whichever works out best for you.
However, I do believe that if you choose the exclusion that you must file your return by the deadline, including any extensions. That's well past for 2005 now, so you'll only be able to claim the foreign tax credit at best.
2007-01-03 16:51:46 · answer #2 · answered by Bostonian In MO 7 · 0⤊ 0⤋
Yes, you need to file a return. Claim a foreign income exclusion and you should not have to pay any taxes.
Yes, you can still file a 2005 return late.
2007-01-03 16:09:50 · answer #3 · answered by growing inside 5 · 0⤊ 0⤋
Yes, and yes.
You should always declare your income even if it is earned outside the country. There is a limit to how much you can earn without having to pay income tax. I believe you fall under that category.
For further info on filing late, check out the IRS website: www.irs.gov
2007-01-03 16:08:43 · answer #4 · answered by yahoo_girl 2 · 0⤊ 0⤋