My husband took out funds from his plan(tax was excluded when he was investing in this plan) during the last fiscal year but he spent a good portion of 2006 abroad, does any one know if the funds taken out is considered as part of his income for 2006. For people spending time abroad, there is an exemption of the first USD80,000(income) for tax, I am not sure if taking out funds from his plan is considered as income!
2007-01-18 07:45:56 · 1 answers · asked by hhbasile 4 in Business & Finance ➔ Taxes ➔ United States
He cannot use the exclusion against the withdrawal. The exclusion is for earned income, that means income he received for his labor. Also, in order to qualify for the exclusion, he needs to have a tax home outside the US for either a full tax year (a full calendar year), or for a total of 330 days during any 365 day period. Also, if his qualifying period is less than the full year, the $80,000 exclusion amount is reduced accordingly.
2007-01-18 08:02:42 · answer #1 · answered by jseah114 6 · 1⤊ 0⤋