How do I file taxes if I teach overseas, and am not taxed?

Answer 1

You most likely are eligible to claim the Foreign Earned Income Exclusion on Form 2555. For tax year 2006 the amount foreign income that can be excluded from tax has been increased to $82,400.

You can see if you meet the requirements here:
http://www.irs.gov/businesses/small/international/article/0,,id=96822,00.html

Here is Form 2555 and its instructions
http://www.irs.gov/pub/irs-pdf/f2555.pdf
http://www.irs.gov/instructions/i2555/index.html

Answer 2

TeacherKuwait: Hi I worked as a US Defense Contractor in Saudi Arabia for 17 years, so I know what I'm talkin about. Bostonia and TMA are correct, follow their advice.

I'll also add a few points:

1.) You may not get a standard W-2 Form from Kuwait. Don't worry, just request your employer provide you an official-looking annual earnings statement, that will suffice.

2.) You may have to file your State Taxes as a non-resident. Verify the rules that apply to you.

3.) The key thing is to see which of the two rules you qualify for the overseas exemption under: a.) Physical Presence Test, or b.) Bona Fide Residence Test. If you're a new arrival you will probably have to file under the PPT, which means you may have to ask for an extension until you actually meet this requirement (330 of the previous 365 days). For the BFRT, you must have been overseas for an entire calendar year, Jan 1 - Dec 31, before you are eligible. Usually the first year you file under PPT, then subsequent years it's BFRT.

4.) If you discuss this topic with co-workers and other US expats in Kuwait, it's likely a high percentage of them will be misinformed of the facts, specially recent arrivals. I advise caution on this matter, make sure you get it right.

Good luck.

ps: Dubai is a nice weekend trip. Women can actually lay out by the pool or beach in bikinis. Very cosmopolitan city.

Answer 3

US citizens and legal residents are taxed on their world-wide income from all sources.

You may be able to exclude some or all of your foreign earned income from US taxation OR claim a credit for foreign income taxes paid. There are complex rules on both of these so it's best to get a copy of IRS Pub 54 from the IRS website and educate yourself. Among other things, you must file a timely return to claim the Foreign Earned Income Exclusion; if you miss the filing deadline by a single day it's lost forever.

Since you are not subject to US withholding you may have to make quarterly estimated tax payments using Form 1040ES if you expect to have any US tax liability.

Answer 4

You basically have to ask: who is paying my bills? Just ask an accountant-- if you are a permanent resident in the US you will have to pay taxes UNLESS you are working with a VISA in another country and you are paying foreign taxes...

Answer 5

do you get a w2 or 1099?