How does it affect my tax foreign income?

First, it is important to realize that if your tax situation is particularly complicated, it is always good to talk to certified public accountants and make sure you gain the full benefits of the Tax Act. Earning foreign income as a citizen of the United States is a somewhat complicated procedure and claim that the exception can be a bit complicated. In some situations, however, it may be straightforward and you can be able to calculate your exception easily yourself. However, in order for the United States to adapt to citizens who can pay taxes abroad, have created a very useful procedure that would help pay too much taxes: exclusion of foreign income. For Tuobčan must be eligible for this exclusion, it must be able to prove that they are either Bona Fide inhabitants of a foreign country or that they were physically present there. Of course, he must also work in a foreign country. Exclusion can be requested using form 2555 or in some cases a shorter form of 2555 -z.

You only need to work in a foreign country to request the exemption of foreign income. Where you are paid and where you are paid, it does not play whether or not you have a foreign income. If you stay in the United States, but the German company is paid to a German bank account, is still considered a national income and is normally taxed. Conversely, if you work in the United States, but the employer for which you work is an American company and your income is involved in your US bank account, you are still entitled to increase foreign income.

The calculation that shows your total tax burden is best demonstrated by an example: Suppose you are working for a large international company as a hotel consultant. You work five days a week, with a holiday and a sick holiday, which gives you a total of 220 days of work. You are paid each year for $ 55,000 and have received a small live $ 10,000 scholarship to cover your renthim. Although most of the time you have worked abroad, you have sometimes returned to the United States to work in a home office, a total of 18 days. If you want to calculate your tax burden in the United States, take the number of days (18) and divide it by the total number of days worked (220) and multiply it according to the total income plus scholarship ($ 65,000), resulting in a $ 5,400 tax burden.