working overseas and paid FICA but not federal will I owe this year?

Question

employed for 1 year continuosly in Japan(stationed here)

Answer 1

I'm assuming that you are NOT an employee of the US government or one if its instrumentalities or in the military. (If you ARE, you may have problems on your hands with no Federal income tax withholdings.) Since FICA was withheld it appears that you are employed by a US company with a presence in Japan.

In most cases, foreign earned income is eligible for the Foreign Earned Income Exclusion if you file a timely return, i.e. by the deadline including any approved extensions. I believe that's $82,400 for 2006. Alternatively you can take a credit for any foreign taxes paid. You should figure your taxes both ways and file whichever way works out best for you.

Here's a link to the Form 2555 instructions. This should get you started. http://www.irs.gov/pub/irs-pdf/i2555.pdf