USA income tax and the country they are residing in
2007-09-09 19:21:26 · 4 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ Other - Taxes
Good News, you get an exemption of the first $82,400 of foreign earned income for 2006. However, you have to be working outside of the country for 1 year. There are also provisions for getting credit for foreign taxes paid in some circumstances. Best bet is to see a tax pro.
2007-09-10 02:05:49 · answer #1 · answered by exirsman 5 · 0⤊ 1⤋
US citizens and residents are subject to US taxation from all sources world-wide. There are exclusions for foreign earned income under certain circumstances that you may be eligible for. You can alternatively claim a credit for any foreign income taxes paid. The result is that you pay tax at the higher of the US or the foreign rates but are not double taxed. You do have to file returns with the US and the foreign country as required by their laws.
See IRS Pub 54 http://www.irs.gov/pub/irs-pdf/p54.pdf for further guidance.
2007-09-09 19:56:37 · answer #2 · answered by Bostonian In MO 7 · 2⤊ 0⤋
You do have to file and pay federal income tax, but would get a credit (maybe not $ for $) for taxes that you had to pay to another country on that income. You also get to exclude up to $82,400 in income that you have earned in a foreign country, this is called the foreign income exclusion. There are certain rules you have to meet for it, and I have attached a link to it for you.
2007-09-10 02:27:27 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Americans are subject to State tax but not Income tax when working abroad.
2007-09-09 19:25:34 · answer #4 · answered by SGElite 7 · 0⤊ 4⤋