Many people believe that a US citizen gets a free pass if you work outside the US. Whether you are working in the United States or you are overseas, you generally have to file a US tax return being that you are a US citizen. You need to file if you made over $8,950 (whether in the US or Abroad). Before getting into the what to do filing details, realize, if you have money in a foreign institution over $10k, then you must fill out form TD F90-22.1 This is not to be sent in with a tax return as it is sent to a different address (on form). In handing your tax returns (whether past or present), you will need to fill out the respective form 1040 (Schedule C). If you have received a gift from a foreign “trust” or person you will need to fill out Form 3520 or 3520-A.. When you report your income, you will report it in US dollars taking into account exchange rates. Most of the time you will not have to pay any taxes unless you still report income after taking into account the Foreign Earned Income Exclusion as well as the Foreign Housing Exclusion. You can deduct up to $87,600 for 2008 ($91,400 for 2009) with the Foreign Earned Income Exclusion. In addition the Foreign Housing Exclusion allows you to deduct any housing payments (made by you or your employer) if you were there for a year (Bona Fide Residence Test) or you were abroad (in many countries) at least 330 days in a 12 month consecutive period (Physical Presence Test). You can deduct no more than 16% of the Foreign Earned Income Exclusion so $14,016 for 2008. To claim the these exclusions IRS Form 2555 (Foreign Earned Credit) must be filled out and attached to your 1040. If you do not have an housing exclusion to note then IRS Form 2555-EZ will do just fine. Working Abroad Tax Recommendations 1. Do not delay, the longer you wait, the worst penalties can get. It is NEVER too late to file a return. 2. Use US Tax Shield as the forms can get complex and time consuming. You are usually better off with a tax pro because we can help make sure not only you fill out all required forms correctly but you get the biggest deductions. 3. If you need guidance in filing back taxes, follow our easy steps on Filing Back IRS Taxes.   You Have a Right to Tax Representation If you have been contacted by the IRS or your state’s Department of Taxation, or have received tax liens, levies or notices of IRS intention to do so,

Call us 877-829-3535 for your free consultation.