Contact UsIf I worked for a foreign company in a foreign country, do I still need to pay tax in US since I need to pay tax in the foreign country?
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Tax Professional Answers
Kathryn Morgan
If you are a US Citizen or Resident then you must report your worldwide income and pay taxes on any that is not subject to an exclusion. If you meet certain tests you may exclude up to $95,100 in earned income from working outside the US. Even if you don't meet the exclusion, or if you have income over the exclusion amount, you may qualify for a credit against the taxes you paid in a foreign country. There are a lot of different ways to figure those situations and I recommend you hire a professional to assist you get the best outcome.
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549 weeks ago
Virginia La Torre Jeker, J.D.
Hi - I'm a US tax attorney in Dubai. I have written a lot about this topic here http://dubai.angloinfo.com/information/money/general-taxes/us-expat-tax" style="font-size:10pt;">http://dubai.angloinfo.com/information/money/general-taxes/us-expat-tax
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545 weeks ago
and also check my US tax blog - am sure there are many posts that will be of interest to you. http://blogs.angloinfo.com/us-tax/about/" style="font-size:10pt;">http://blogs.angloinfo.com/us-tax/about/
Chuck Heyde, CPA, CGMA
I love this question. I get a lot of work this way. Most people incorrectly think that if they have the Foreign Exclusion and/or Foreign Tax Credits that they have not obligation to file a US tax return.
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544 weeks ago
They may have little to no tax due. But that is not the issue. The fact is a US taxpayer must file a US tax return if their income exceeds their personal exemptions and standard deduction (basically $10,000).
Then if your return is prepared correctly, with the use of the Foreign Exclusion, Foreign Tax Credits, and the Income Tax Treaty, your US tax liability should be very LOW.
Here is a big catch - if you fail to file and the IRS catches you - they can deny the Foreign Exclusion. So I suggest you contact an US Expat Tax Professional as soon as possible. (My info is below.)
Regards,
Chuck Heyde, CPA, CGMA
US Expat Tax Pro
www.GEMMS.us
David McKeegan
Hello!
With regards to your message, yes, you will have to file a US return every year (regardless of whether you are working in the US or not). However, just because you have to file a US return, does not mean you will have to pay anything to the US. Fortunately, there are a number of exclusions and credits in place (for expats) which limit dual taxation.
One of the largest exclusions is the Foreign Earned Income Exclusion. With the FEIE, the first 97K (for the 2013 filing) of income is exempt from tax in the US. If you make under this level, you generally do not owe anything to the US.
Also, the US has several tax treaties in place with other countries. If you are living in a tax treaty country, then your chances of dual taxation are slim as well.
I hope this helps! Please feel free to reach me if you have any further questions.
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542 weeks ago
With regards to your message, yes, you will have to file a US return every year (regardless of whether you are working in the US or not). However, just because you have to file a US return, does not mean you will have to pay anything to the US. Fortunately, there are a number of exclusions and credits in place (for expats) which limit dual taxation.
One of the largest exclusions is the Foreign Earned Income Exclusion. With the FEIE, the first 97K (for the 2013 filing) of income is exempt from tax in the US. If you make under this level, you generally do not owe anything to the US.
Also, the US has several tax treaties in place with other countries. If you are living in a tax treaty country, then your chances of dual taxation are slim as well.
I hope this helps! Please feel free to reach me if you have any further questions.