can I be exempt from paying taxes if I prove to be a bona fide resident in a foreign country?

Question

I read some of the IRS pub.54. It says that taxes can be deducted(?) if I prove to be a bona fide resident in a foreign country. I have been living in France for the past two years now. I also posess a residency card (as a student). All my activity is based here is what I'm saying. So I recently worked for a French company as a self-employed. In order for them to pay me I have to show proof that I pay taxes in US. They've given me a form to get filled out by me and the IRS. NOW-my question is can I be exempt from paying taxes in the US (once I prove that my "tax home" is France)? And how do I prove that I am a bona fide resident of France?

The form given to me by the French company is called "Application for Reduction of/Exemption From (1)

And in this application there is a part where the IRS must certify that: --the IRS is retaining the first copy of this claim with a view to charging to US direct taxes the income in respect of which the claim is made and which are totalized on the front (col.1), and ---etc.

Does this mean in plain English that I won't be exempt from taxes in US even if I am a bona fide resident of France? This form is basically saying that I will claim in US, correct?

Answer 1

Are you exempt? No.

If you made $400 or more from self employment income, you have a filing requirement. Depending on circumstances you may be paying the SE tax to the US government or to France (go the ssa website and read the totalization agreement). The forms the French company is asking you to fill out may be because of that totalization agreement.

If you had wages, you have a filing requirement if your income was $8750 or more (2007 cutoff).

Dr. Deth has put it succinctly. At least one country is *GOING* to tax you.

The French form you cite is intended for a US citizen/resident who is a NON-resident of France. The form is asking you and IRS to confirm that you are a law abiding, taxpaying US person. Then under the treaty, not only you get a lower tax rate on certain types of income, the payer doesn't have to withhold as much tax and you are less likely to have to file a French tax return to get a refund.

If you are resident of France, the form doesn't even apply. And if you haven't been filing your US tax returns, there's no way the IRS is going to certify that you have.

Answer 2

based upon the quantity and character of your US source earnings, you are able to evaluate claiming to be a resident of the united kingdom for tax purposes below the US-uk double tax treaty. (whether possible try this for previous years is a query that demands a sprint diagnosis.) this won't exempt you from tax on the earnings on your place, yet whilst that's the only merchandise human beings earnings you have the tax might desire to be practicable. in spite of everything, it looks to me you ought to qualify for the earned earnings exclusion on the inspiration of bona fide place of abode. even regardless of the undeniable fact that, that purely covers a constrained volume of earnings. you ought to truthfully report your tax returns with a view to declare any of those advantages, regardless of the undeniable fact that some could be attainable even on a antisocial return. that's a complicated concern, and you will possibly desire to seek for expert suggestion from between the various qualified US tax preparers interior the united kingdom.

Answer 3

A certain amount of your foreign income can be exempt from US tax, and you can usually deduct taxes that you paid to a foreign country.

Answer 4

you can't avoid taxes in both countries