Home -> Non Resident Tax Portal -> Expatriate Tax Services - Income Tax Preparation of Expatriate Tax Forms Form 2555 Foreign Earned Income Exclusion - Form 1116 Foreign Tax Credit - Form 8854 Instructions
The expatriation tax provisions apply to U.S. citizens who have renounced their citizenship and long-term residents, green card holders, permanent residents who have ended their US residency for tax purposes
United States citizens, Long term resident aliens, green card holders, permanent residents who live or work outside United States, are considered Expatriates for tax purposes, and have to report their worldwide income and file United States Income Taxes.
Also if the expatriates or green card tax holders relinquish their US citizenship they have to file Form 8854 - Expatriate Tax Statement. Failure to file Form 8854, carries a penalty of $10,000
Read How to file Expatriate Tax Statement - Form 8854 Instructions.
Expatriate tax obligations to the United States by filing Expatriate Tax Forms like Form 2555, Form 1116, Form 8854
2. Foreign Housing Exclusion - Expatriate Tax Form 2555 Instructions Learn More
3. Foreign Tax Credit - Expatriate Tax Form 1116 Instructions Learn More
4. Expatriate Tax Statement - Form 8854 Instructions Learn More
We will explain each of these to reduce the expatriate taxes required to be filed by a United States citizen, living and working outside the United States.
1. Foreign Earned Income Exclusion - Form 2555 Instructions
Income tax rules for expatriate taxes allow expatriate tax exemptions, to offset double taxation by filing IRS tax form 2555.
By Filing Form 2555 you may be able to claim upto $87,500 of your foreign earned income (foreign earned income minus foreign housing exclusion) in 2008.
If both you and your spouse work abroad, you can claim upto $ 171,400 in foreign earned income exclusion.
You can claim Foreign Earned Income Exclusion if you have foreign earned income and meet all the three requirements;
a) Foreign Tax Home
US Citizen or Resident Alien with a Foreign Tax Home. Tax home is the main place or work, business in a foreign country, and not the family home in United States.
b) Bona fide Residence Test
US Citizen or Resident Alien (has Tax treaty benefits or national of the Foreign Country), who is a bona fide resident in a foreign country. Bona fide residence means establishing a presence in a foreign country like extended stay, intention and purpose of your stay like for work or for business.
c) Physical Presence Test
US Citizen or Resident Alien who is physically present in a country for more than 330 days in a year.
2. Foreign Earned Housing Exclusion - Form 2555 Instructions
Foreign Housing exclusion applies for amount paid for a house (Rent, Utilities etc.,) in a foreign country, with employer provided funds.
Foreign Housing deduction applies for amount paid for a house in a foreign country, with self-employment earnings like involving in business activities.
If you donot have self employment income, you cannot claim Foreign housing deduction.
3. Foreign Tax Credit - Form 1116 Instructions
Foreign taxes paid by a US taxpayer can often be credited against US tax liability or deducted in figuring taxable income on a US income tax return. It is often better to claim a credit for foreign taxes rather than to deduct them.
Form 1116 needs to be filed to claim a Foreign Tax Credit by Expatriates, for taxes paid or accrued to a Foreign Country
outside the United States during a tax year. Its filed along with Form 1040. Your Foreign Tax Credit is reduced , if you are not reporting your foreign income in Form 1040 based on;
1. Foreign Earned Income Exclusion
2. Foreign Housing Exclusion
3. Income from Puerto Rico, exempt from US Tax
4. Possession Exclusion
5. Extra territorial Income Exclusion
However you can claim Foreign Tax Credit, without filing Form 1116 if you meet the following;
1. Source of Foreign Income is Passive Income - Interests and Dividends
2. Your Foreign Tax Credit to be claimed is not more than $300
3. Your foreign income and taxes are reported on Form 1099 INT or Form 1099 DIV
Expatriates can avoid double taxation if a tax treaty exists between the United States and their foreign country.
Also if you have a Green Card and a US Expatriate, living outside the United States, please visit Green Card Taxes.
For Expatriate Tax Services, Green card Taxes please and filing of Expatriate Tax Forms Form 2555, Form 1116, Form 8854 please Contact Us or post your questions in the Forum.
Expatriate Tax Services - Income Tax Preparation for US Citizens Living Abroad - Expatriate Taxation - Expatriate Tax Exemption - Expatriate Taxes - Expatriate Tax Laws - Expatriate Tax Equalization - Expatriate Tax Returns - Expatriate Tax Forms 2555 - Foreign Earned Income Exclusion - Form 1116 - Foreign Tax Credit - Expatriate Tax Statement - Form 8854 Instructions
The expatriation tax provisions apply to U.S. citizens who have renounced their citizenship and long-term residents, green card holders, permanent residents who have ended their US residency for tax purposes
United States citizens, Long term resident aliens, green card holders, permanent residents who live or work outside United States, are considered Expatriates for tax purposes, and have to report their worldwide income and file United States Income Taxes.
Also if the expatriates or green card tax holders relinquish their US citizenship they have to file Form 8854 - Expatriate Tax Statement. Failure to file Form 8854, carries a penalty of $10,000
Read How to file Expatriate Tax Statement - Form 8854 Instructions.
Expatriate tax obligations to the United States by filing Expatriate Tax Forms like Form 2555, Form 1116, Form 8854
Expatriate Tax Forms - Foreign Earned Income, Housing Exclusion (Form 2555), Foreign Earned Tax Credit (Form 1116) and Expatriate Information Tax Statement (Form 8854)
1. Foreign Earned Income Exclusion and Deduction - Expatriate Tax Form 2555 Instructions Learn More2. Foreign Housing Exclusion - Expatriate Tax Form 2555 Instructions Learn More
3. Foreign Tax Credit - Expatriate Tax Form 1116 Instructions Learn More
4. Expatriate Tax Statement - Form 8854 Instructions Learn More
We will explain each of these to reduce the expatriate taxes required to be filed by a United States citizen, living and working outside the United States.
1. Foreign Earned Income Exclusion - Form 2555 Instructions
Income tax rules for expatriate taxes allow expatriate tax exemptions, to offset double taxation by filing IRS tax form 2555.
By Filing Form 2555 you may be able to claim upto $87,500 of your foreign earned income (foreign earned income minus foreign housing exclusion) in 2008.
If both you and your spouse work abroad, you can claim upto $ 171,400 in foreign earned income exclusion.
You can claim Foreign Earned Income Exclusion if you have foreign earned income and meet all the three requirements;
a) Foreign Tax Home
US Citizen or Resident Alien with a Foreign Tax Home. Tax home is the main place or work, business in a foreign country, and not the family home in United States.
b) Bona fide Residence Test
US Citizen or Resident Alien (has Tax treaty benefits or national of the Foreign Country), who is a bona fide resident in a foreign country. Bona fide residence means establishing a presence in a foreign country like extended stay, intention and purpose of your stay like for work or for business.
c) Physical Presence Test
US Citizen or Resident Alien who is physically present in a country for more than 330 days in a year.
2. Foreign Earned Housing Exclusion - Form 2555 Instructions
Foreign Housing exclusion applies for amount paid for a house (Rent, Utilities etc.,) in a foreign country, with employer provided funds.
Foreign Housing deduction applies for amount paid for a house in a foreign country, with self-employment earnings like involving in business activities.
If you donot have self employment income, you cannot claim Foreign housing deduction.
3. Foreign Tax Credit - Form 1116 Instructions
Foreign taxes paid by a US taxpayer can often be credited against US tax liability or deducted in figuring taxable income on a US income tax return. It is often better to claim a credit for foreign taxes rather than to deduct them.
Form 1116 needs to be filed to claim a Foreign Tax Credit by Expatriates, for taxes paid or accrued to a Foreign Country
outside the United States during a tax year. Its filed along with Form 1040. Your Foreign Tax Credit is reduced , if you are not reporting your foreign income in Form 1040 based on;
1. Foreign Earned Income Exclusion
2. Foreign Housing Exclusion
3. Income from Puerto Rico, exempt from US Tax
4. Possession Exclusion
5. Extra territorial Income Exclusion
However you can claim Foreign Tax Credit, without filing Form 1116 if you meet the following;
1. Source of Foreign Income is Passive Income - Interests and Dividends
2. Your Foreign Tax Credit to be claimed is not more than $300
3. Your foreign income and taxes are reported on Form 1099 INT or Form 1099 DIV
Expatriates can avoid double taxation if a tax treaty exists between the United States and their foreign country.
Also if you have a Green Card and a US Expatriate, living outside the United States, please visit Green Card Taxes.
For Expatriate Tax Services, Green card Taxes please and filing of Expatriate Tax Forms Form 2555, Form 1116, Form 8854 please Contact Us or post your questions in the Forum.