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Old 04-25-2012, 04:10 AM
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u.s. citizen working abroad - do i still need to file for u.s. taxes?

Hello,

I'm a U.S. citizen working abroad (Taiwan). I haven't filed for U.S. taxes for the 5 years I've been working in Taiwan. My income is less than 30k USD a year.
Does anybody know if I still need to file for U.S. taxes? I don't want this to come back to me in the future giving me trouble.

By the way, I do pay tax in Taiwan.

All/any feedback would be appreciated.

Thanks.



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Old 04-25-2012, 03:16 PM
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“Does anybody know if I still need to file for U.S. taxes?------> If your income is low enough, you may not need to file a tax return. However, even if you do not have to file, you should file a federal income tax return if you are getting a refund(if you are subject to refund) from the IRS. As long as your income overseas in Taiwan is self employment income, then you MUST file Sch C as long as the amoun ton Sch C line 29/31 is $400 or exceeds $400 and also need to pay self employment tax as long as the amoun ton Sch SE line 4 is $400 or exceeds $400. So, yea. You MUST file US returns, both federal and state, returns as a self employer. As a US person, a US citizen, a GC holder, you are subject to US taxes on your US soirce and world wide income, in this case, your income that you earned in Taiwan. You may be subject to foreign earned income exclusion. Regarding your FEIE on your earned income in Taiwan, either you must be considered a "bona fide resident" of Taiwan or be physically present in Taiwab for 330 full days in a 12 month period.The qualifying period for the bona fide residence test must include one full calendar year. Brief trips or vacations outside the foreign country will not jeopardize your status as a bona fide resident, as long as the trips are brief and you clearly intended to return to Taiwan. You can even make brief trips to the US.Special treatment of income under an income tax treaty will not prevent you from meeting the bona fide residence test. You are considered physically present in Taiwan if you reside in Taiwan for at least 330 full days in a 12-month period. You can live and work in any number of foreign countries including Taiwan, but you must be physically present in those countries for at least 330 full days. The qualifying period can be any consecutive 12-month period of time. You do not have to begin your qualifying period with your first day in a Taiwan. Under the physical presence test, you can choose any consecutive 12-month period to qualify for your Taiwanese source earned income exclusion. You would then prorate your maximum exclusion by the amount of days you were physically present during the tax year. Your pro-rated exclusion amount may not exceed the maximum allowable exclusion. You may also qualify for a prorated exclusion if you intended to meet all the time requirements but you left the country due to civil unrest. According to IRS Instructions for Form 2555: You can claim foreign tax credit on your taxes that you pay to Taiwan on your income that you earn in Taiwan by filing form 1116 and claiming your FTC on 1040 line 47 or on Sch A line 8.
Please visit the IRS Website for more info in detail: Foreign Earned Income Exclusion - Can I Claim the Exclusion or Deduction?
“I don't want this to come back to me in the future giving me trouble.”---->As said above, you, as a self employer whose net earnings exceeds $400, MUST file US returns and can claim your foreign tax credits on your US returns.



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Old 04-26-2012, 04:05 AM
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Many thanks WNHOUGH for your feedback, this helps me a lot. I think I need to start filing for my U.S. taxes now...but I just missed the tax season...I hope when i file next year they won't question too much of the previous 5 years i haven't filed my taxes, or is there anything I can do to make up for this?
One more thing I wanted to clarify, I'm not self employed but work for a Taiwan Company under a Taiwan working visa permit. Also, my job requires me to travel back to the U.S. and/or other countries, so on average I'm in Taiwan for less than 300 days a year.

Thanks again



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Old 04-26-2012, 11:22 AM
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“.I hope when i file next year they won't question too much of the previous 5 years i haven't filed my taxes, or is there anything I can do to make up for this?”---->As you missed your tax filing in previous years, 5 or 6 year, I guess, you should still submit your return information late. Depending on the total amount and type of income you received during the years, you may not need to file any. In the first place, the law requires you to file a return if you meet certain conditions. (If you meet the conditions, it creates a "filing requirement"). If you owe tax money to the IRS, you may be responsible for late fees and interest charges. when you owe money to the IRS, filing correct back tax returns may be all that is required in order to eliminate the balance due or, perhaps, lower it significantly. If, however, you are due a refund, filing a late tax return may still entitle you to the money as long as you file before the end of the statute of limitations. The IRS will only allow you to receive a tax refund for three years after the due date of the return. While it is always important to file all of your required tax returns, if you are due a refund, it is especially important that you file your tax returns as soon as possible. If you wait too long, the statute of limitations on your refund can expire and you will be unable to receive the refund when you finally file the return. The IRS requires that you file, at a minimum, the past six tax returns and the current year, although they reserve the right to request as many unfiled returns as they need. If any of these years have a filing requirement and remain unfiled, the IRS will consider the taxpayer to be out of compliance. I guess you need to contact the IRS for more information in detail,OK???
One more thing I wanted to clarify,
“ I'm not self employed but work for a Taiwan Company under a Taiwan working visa permit. Also, my job requires me to travel back to the U.S. and/or other countries, so on average I'm in Taiwan for less than 300 days a year.”----->You can still claim your FEIC on your income that you earn in Taiwan; for 2011, you may elect to exclude up to $92,900 of earned income from foreign country(ies). TO qualify for this exclusion, as said, you must either reside in Taiwan for the entire year or be physically present in Taiwan for 330 full days during a 12month period. When you qualify for the exclusion, but reside in Taiwan only part of the year, the exclusion must be prorated. For example, if you reside in Taiwan for the last 210 days of 2009 and the first 300 days in 2010, you meet the 330 days(as 510>330) in a 12 month period requirement. Thus you qulify for the FEIE in each year. For example, assume that the max exclusion in both years is $91,400, the maximum exclusion must be prorated in both years as following:2009; 210/365*$91,400=$52,586. 2010:300/365*$91,400=$75,123. OR if you were not subject to FEIE, but paid tax(es) to Taiwan, then you can claim your foreign tax credit on your Taiwanese tax(es) on your US returns, federal and state return by filing form 1116. (REMEMEBR:you can’t claim both FEIC and foreing tax credit at the same time.)Then, you must file US returns. As you said, UNLESS you are a self employer, then, you do NOT need to file Sch C/Sch SE pay SECA taxes/quarterly estimated taxes to the IRS.



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Old 04-28-2012, 02:19 AM
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Thank you so much! You are so helpful! I will see if there are still any sites online where I can still file my taxes.
I really appreciate all your help!



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Old 04-28-2012, 02:36 AM
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Good luck to you;UNLESS you are sure of it, you need to contact the IRS~~



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