No it does not ask or mention anything about self-employment tax.
The form is 2555-EZ. There is also a form 2555, but I've always been able to use the shorter 'ez'
USA Taxes?
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wrldtrvlr123
- Posts: 1173
- Joined: Sat Feb 06, 2010 10:59 am
- Location: Japan
There is no reason to pay self-employment tax, unless as has been stated, you want to keep paying into SS.
The Foreign Income Exclusion is very easy to take once you have done it. I just filed my taxes using TurboTax and it was quite easy (and that was with filing an extension, living part of the tax year in the US and part overseas). Also, why does your accountant think it's a good idea to pay taxes on the overseas money and THEN file an amended return to get your money back on the taxes you needlessly paid (I would hate to be cynical and say it's so you have to pay them again)?
Filing an extension to qualify for the exclusion is perfectly legal and I have done so several time before.
The Foreign Income Exclusion is very easy to take once you have done it. I just filed my taxes using TurboTax and it was quite easy (and that was with filing an extension, living part of the tax year in the US and part overseas). Also, why does your accountant think it's a good idea to pay taxes on the overseas money and THEN file an amended return to get your money back on the taxes you needlessly paid (I would hate to be cynical and say it's so you have to pay them again)?
Filing an extension to qualify for the exclusion is perfectly legal and I have done so several time before.
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msteachkids
- Posts: 14
- Joined: Sat May 28, 2011 9:26 pm
I think the reason she wanted me to go ahead and file is because if I owe the IRS any money for 2011 - which is a possibility due to my husband's income - it must be paid by April 15 or I will incur penalties. (I didn't know that even if you file an extension - the IRS will still assess penalties/interest beginning April 15 if you owe them anything.)
She just thought it would be easier to file an amended return after I have spent 12 months abroad which will help me determine if I will be a "bonafide resident" or "physical resident" than waiting for those 12 months PLUS having to pay any potential penalties.
But that's why I brought my question to this forum - because I know you guys have so much knowledge and information! ;-)
She just thought it would be easier to file an amended return after I have spent 12 months abroad which will help me determine if I will be a "bonafide resident" or "physical resident" than waiting for those 12 months PLUS having to pay any potential penalties.
But that's why I brought my question to this forum - because I know you guys have so much knowledge and information! ;-)
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wrldtrvlr123
- Posts: 1173
- Joined: Sat Feb 06, 2010 10:59 am
- Location: Japan
[quote="msteachkids"]I think the reason she wanted me to go ahead and file is because if I owe the IRS any money for 2011 - which is a possibility due to my husband's income - it must be paid by April 15 or I will incur penalties. (I didn't know that even if you file an extension - the IRS will still assess penalties/interest beginning April 15 if you owe them anything.)
She just thought it would be easier to file an amended return after I have spent 12 months abroad which will help me determine if I will be a "bonafide resident" or "physical resident" than waiting for those 12 months PLUS having to pay any potential penalties.
But that's why I brought my question to this forum - because I know you guys have so much knowledge and information! ;-)[/quote]
If you think you will owe tax, then yes, that would make sense. On the other hand, you (or your accountant) should be able to figure that out ahead of time. There is no monetary difference I am aware of between the different ways to qualify for the foreign income exclusion. So, you will have to pay taxes on everything you earn overseas for that year and then wait to get it back. You can deduct the tax you pay in that foreign country in many cases, but your amended return will be complicated (but I guess that's why you pay an accountant).
She just thought it would be easier to file an amended return after I have spent 12 months abroad which will help me determine if I will be a "bonafide resident" or "physical resident" than waiting for those 12 months PLUS having to pay any potential penalties.
But that's why I brought my question to this forum - because I know you guys have so much knowledge and information! ;-)[/quote]
If you think you will owe tax, then yes, that would make sense. On the other hand, you (or your accountant) should be able to figure that out ahead of time. There is no monetary difference I am aware of between the different ways to qualify for the foreign income exclusion. So, you will have to pay taxes on everything you earn overseas for that year and then wait to get it back. You can deduct the tax you pay in that foreign country in many cases, but your amended return will be complicated (but I guess that's why you pay an accountant).
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BobStrauss
- Posts: 34
- Joined: Sun Oct 03, 2010 11:16 am
From what I have read, you can file for a ¨foreign income tax deduction¨instead of a foreign income exclusion. This way, your foreign earned income is not excluded, but every dollar you pay in foreign income taxes (restricted on a country-by-country basis) can be used as a tax deduction in the United States.
So if you pay more in foreign income taxes than you would in the USA, you still file taxes like you would back home, but owe nothing.
The one advantage to this is that you can utilize retirement accounts such as Roth IRAs, which you wouldn´t be able to use otherwise.
So if you pay more in foreign income taxes than you would in the USA, you still file taxes like you would back home, but owe nothing.
The one advantage to this is that you can utilize retirement accounts such as Roth IRAs, which you wouldn´t be able to use otherwise.
I have worked in overseas schools for the past 3 years and have not had to pay any US taxes at all, as I live outside the US long enough each year. This is the case with most of my colleagues who do not have many assets besides their salary. I pay my accountant, who is also an expat, to file my taxes for me & have not had any problems.
Filing
I don't know about the other stuff you mentioned (business owner, owing money, ec.), but if you qualify as an overseas resident, you can easily file using the 1040 and 2555 EZ.
Every year I file a 1040 and 2555 EZ. Simple enough :-)
Good Luck!
Every year I file a 1040 and 2555 EZ. Simple enough :-)
Good Luck!