Hello all.

Before this year, my taxes were always very simple. This year, I'm suddenly in over my head...

This year, for the first time, I am working as a contractor instead of as an employee. All of my work is overseas, but for US based organizations. The organizations do not do withholding. I get paid in US dollars to my US bank account. This means that I should pay estimated taxes (I think).

Except: In IRS publication 505, page 17, there is an exclusion outlined under "Who does not have to pay estimated tax."

I meet all three of the requirements:
I had no tax liability for 2010 (owed $0 taxes - it was a lean year).
I was a US citizen for the whole year.
My 2010 tax year covered a 12 month period.

So, I decided that I do not need to pay estimated taxes this year and will take my income into account at the end of the year when I pay my taxes at the normal time.

Question 1 Based on the above information, is it true that I do not need to be paying estimated taxes?

Also, I am trying to understand "Foreign Earned Income."

Question 2 If I am living overseas while working, is my income "Foreign Earned Income" even if I am getting paid by a US based organization into a US based bank account?

I am also reading about a Foreign Earned Income Exclusion. As I understand it, I can exempt ~$90,000 of income if I reside outside the USA for at least 330 calendar days during 12 consecutive months based on the physical presence test. I will meet this test, but the 12 months will fall roughly 1/3 in 2011 and 2/3 in 2012.

Question 3 Given the above: For which year do I take the Foreign Earned Income Exclusion if at all? How does this work?

Finally, I got married in May 2011, which means that my wife and I will be filing jointly for the first time for our 2011 taxes. She will also be working overseas as a contractor for the same time period I will with the same organization. She will also not have to pay estimated taxes for this year (we think) based on the same exclusion I outlined above.

Question 4 How will getting married and/or filing jointly affect any of the above?

Question 5 Starting in January 2012 we expect to be liable for paying estimated taxes because we expect that we will have taxes to pay for 2011, and therefore not be eligible for the estimated tax exclusion in 2012 as we were in 2011. But, we expect to be making less money than we will be eligible to withhold based on the Foreign Earned Income Exclusion. Will we still need to pay estimated taxes even if all that money is eventually going to be excluded?

Question 6 How does one go about paying estimated taxes while living in a place overseas with no internet access or reliable postal service?

Thanks for any help or advice you may be able to provide!