Do I have to report my out of country income when I file my US taxes?

Question

Last year I worked in Mexico....I made the equivilant of 5,000 US dollars for the entire year, as a part time university english instructor. I paid taxes to the Mexican government while in Mexico, and I spent all of the money before returning to the US. so....do i need to report this income when i file my taxes this year in the US? i hope not, because that wouldn't make sense to me, it would be like paying taxes twice!

Answer 1

You report the income from Mexico on your US income tax return.
If you have paid income taxes to Mexico, when you file your US return, you can either get a credit against taxes you owe to the US, or you can take a deduction on Schedule A.

Here is the publication explaining your options.

http://www.irs.gov/businesses/small/international/article/0,,id=97037,00.html

Answer 2

All US Citizens MUST report their worldwide income.

But as grandma says, you either can exclude up to a certain amount of foreign wages ($5000 is within the range), OR you can claim all the income and get a tax credit for taxes paid to the foreign entity. In your case, you probably will be ahead if you claim the income and the tax paid.

WealthBuilder
Tax Specialist

Answer 3

Yes you need to report it, but you can take a credit for foreign taxes paid, so you won't get taxed twice.

Answer 4

yes

Answer 5

You sure do.