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Yada Yada / The Off Topic Arena

Discussion in 'Off-Topic Forum' started by Rye83, Sep 27, 2014.

  1. OP
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    Rye83

    Rye83 with pastrami Admin Secured Account Highly Rated Poster SC Connoisseur Veteran Army

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    I'm not sure that's how it works. I am paid by a US company to a US bank as well. Your location is what matters, not who is paying you. Ask a CPA if you are eligible for that tax credit.

    Edit: I know that DoD civilians do not get the tax exemption because they are getting paid by the USG. That might be why you are getting taxed. Still worth checking into.
     
    Last edited: Aug 4, 2018
  2. cabb

    cabb DI Forum Patron Highly Rated Poster ✤Forum Sponsor✤

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    Review the Foreign Earned Income Exclusion. If you live and work abroad, you may be able to claim the foreign earned income exclusion. If you qualify, you won'tpay tax on up to $100,800 of your wages and other foreign earned income in 2015.

    See
    https://www.irs.gov/newsroom/reporting-foreign-income-eight-tax-tips-from-the-irs
     
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    Rye83

    Rye83 with pastrami Admin Secured Account Highly Rated Poster SC Connoisseur Veteran Army

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    Ok? I'm not sure your point with that post and bold letters was but I'll try: My income is not "foreign" income. It is US income earned while working abroad. It doesn't have to be money from foreign companies/countries to get the tax benefit.

    If you work directly for the USG (such as DoD, DA, DN, etc) you will not get the tax credit....unless you are serving in the US military. Is a SS check considered income and taxed? If not then I suppose it doesn't matter. What about capital gains and interest? I have no idea about that (my uneducated guess would be a "no" for that). Again, best to ask a CPA.
     
  4. PatO

    PatO DI Forum Luminary Highly Rated Poster Showcase Reviewer Veteran Marines

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    SSA may be subject to taxes, if your total income including SSA is above the minimum allowance
     
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  5. cabb

    cabb DI Forum Patron Highly Rated Poster ✤Forum Sponsor✤

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    The bold was from a cut and paste, not my handy work, likely google highlighting my search terms. Foreign in this context means income earned in another country, not income earned from a foreign entity.

    Can I Claim A Foreign Income Tax Exclusion?
    You may qualify for a foreign income tax exclusion from a limited amount of foreign earned income. In order to qualify for the exclusion, you must:

    What Is the Maximum Amount I Can Exclude From My Foreign Earned Income?
    The amount of foreign income that you can exclude is limited to your annual maximum dollar amount limit or actual foreign wages, whichever is less. Since Tax Year 2006, the IRS has adjusted this amount each Tax Year for inflation.

    Below are the maximum amounts for foreign income tax exclusion since the 2006 Tax Year:

    Tax Year Maximum Amount Foreign Income Exclusion
    2018 $104,100


    A certain part of SS is taxed

    If income is between $25,000 and $34,000, up to 50 percent of your benefits may be subject to tax. For income of more than $34,000, up to 85 percent of your benefits may be considered taxable income.
     
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    Rye83

    Rye83 with pastrami Admin Secured Account Highly Rated Poster SC Connoisseur Veteran Army

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    That doesn't really answer the question about SS being covered under the foreign income tax exclusion.

    This website says no but their reasoning that led to the conclusion is flawed.

    I suspect SS income is not covered under the Foreign Earned Income tax credit. And I suspect the real reason from the government is simply, "Because I said so"
     
  7. cabb

    cabb DI Forum Patron Highly Rated Poster ✤Forum Sponsor✤

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    I'll buy that since it makes no difference to me in my current situation. :whistling:
     
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  8. TheDude

    TheDude DI Forum Patron Highly Rated Poster

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    Just taking a wild stab in the dark. But it seems to me the reasoning behind having a policy for "Foreign Earned Income" would be that the assumption is that you are getting taxed on that income by another juristiction and the U.S. would be double taxing you. The US is on a short list (or the only entry on that list) of nations which require citizens to report income no matter where they are at. If the income is being made from outside the U.S. tax juristiction then you still report it but you get an exclusion up to a certain point before they go ahead and double tax you anyways. Probably a simple rule of thumb here is that if you are working with a legit company and you are having to pay taxes (or should be and you are dodging because you know the government isn't going to come after you) to a country other than the U.S. then that income would be exluded?
     
  9. PatO

    PatO DI Forum Luminary Highly Rated Poster Showcase Reviewer Veteran Marines

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    The US and the Philippines have a reciprocal agreement where you don’t pay double taxes.
     
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    Rye83

    Rye83 with pastrami Admin Secured Account Highly Rated Poster SC Connoisseur Veteran Army

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    This doesn't have anything to do with how other countries tax American workers. It is a tax credit simply for working overseas. There are other laws in place for avoiding getting hit twice on income tax.

    If you are working overseas it is best to hire a CPA. It will pay off.
     
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