Welcome Guest. Register Now!  


For 2014 Tax Tips For Year 2014.


Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 01-14-2017, 03:39 PM
Junior Member
 
Join Date: Jan 2017
Posts: 1
Form 2555 Questions

My brother worked in Afghanistan in 2014, but did not work for 330 days... does this mean that he should NOT even fill out the Form 2555

OR does he fill out the 2555 and let the form automatically prorate the income exclusions for the 180 days he was over there?

I am a little confused about this , because i hear people saying that the 330 rule is to get the full income exemption... not necessarily to be allowed to fill out the form.


Thanks in advance for any help



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #2 (permalink)  
Old 01-20-2017, 06:43 AM
Moderator
 
Join Date: Oct 2010
Posts: 5,258
My brother worked in Afghanistan in 2014, but did not work for 330 days... does this mean that he should NOT even fill out the Form 2555?=======>No: to claim the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction, he must have foreign earned income, his tax home must be in the foreign country, Afghanistan, and he must be a U.S. citizen who is a bona fide resident of Afghanistan for an uninterrupted period that includes an entire tax year, or a U.S. citizen or a U.S. resident alien who is physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months. The maximum amount of the Foreign Earned Income Exclusion under Internal Revenue Code was $99,200 for 2014.please follow the IRS inst here: https://www.irs.gov/individuals/inte...n-or-deduction



OR does he fill out the 2555 and let the form automatically prorate the income exclusions for the 180 days he was over there?====>>As said, no; he may claim foreign tax credit instead of foreign earned income exclusion; since he
paid / accrued foreign taxes to Afghanostan and is subject to U.S. tax on the same income, your bro may be able to take either a credit or an itemized deduction for those taxes.He needs to File form 1116 to claim the foreign tax credit. He can take it as a deduction, to reduce his U.S. taxable income by deducting foreign taxes on Sch A of Form 1040 or by taking as a credit ro reduce his U.S. tax liability. In most cases, it is to his advantage to take foreign income taxes as a tax credit. On form 1040 line 48




I am a little confused about this , because i hear people saying that the 330 rule is to get the full income exemption... not necessarily to be allowed to fill out the form.
==========> Not to get the full income exemption however it depends; As mentioned above, you need to file either Form 2555 or From 2555EZ; If you are a U.S. citizen or a resident alien of the US and you live abroad, you are taxed on your worldwide income. However, you may qualify to exclude from income up to an amount of your foreign earnings that is adjusted annually for inflation ( $99,200 for 2014). In addition, you can exclude or deduct certain foreign housing amounts.



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
Ads
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Filing Status and using form 2555 JR2016 Filing Requirements 3 05-11-2016 08:33 AM
Pragmatic questions about IRS form 709 ??? dexter Miscellaneous 1 03-05-2015 03:57 AM
concurrently filing for 3 past years, not sure how to fill form 2555-EZ adifrank Filing Requirements 1 07-02-2012 08:27 AM
A simple question about form 2555-EZ and Bona Fide Residence test adifrank Income 3 06-14-2012 06:39 PM
Self employed income - can I use form 2555 to claim foreign earned income deduction? americanexpat Limited Liability Company 1 06-20-2011 09:24 AM

Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 
Individual
 » Income
 » IRA/Sep
 » Medical
 
Corporations
 » Payroll
 
Forum for CPAs
 
Financial Planning
 
 
 

» Recent Tax Q&A
No Threads to Display.