Hey all you EXPATs

[Sunking]

Im trying to figure out the taxes in all this mideast or asia flying. I was told that in the first year you have to pay both US and visiting country taxes. In year two you get the 87,500 IRS tax free. Say it is'nt so please.

 

[typhoonpilot]

It ain't so.

Read IRS Publication 54


Typhoonpilot

 

[Sunking]

Thanks Typhoon.

 

[fareview]

..and the 'instructions for filing' for IRS form '2555'

fv

 

[higherflyer]

Big Misconception!

Im trying to figure out the taxes in all this mideast or asia flying. I was told that in the first year you have to pay both US and visiting country taxes. In year two you get the 87,500 IRS tax free. Say it is'nt so please.

This is a big misconception with living in a foreign country. Follow the tax rules and all is well. If you set up house outside the US, you will qualify as a bona fide resident and don't have to worry about the physical presence issues. Read the pubs and if you need to, pay for an hour of a tax advisor's time (make sure he/she is conversant in expat tax issues). Filing is pretty easy if you want to do it on your own, but pay attention to the details.

 

[Say Again Over]

I recommend seeing a CPA familiar with this situation, it's not that complicated, I simply gave my CPA a copy of my contract, gave him a schedule of income received from my rental house in the states and the cost of my rental house in Asia, where I work I cannot be a bonafide resident, but I do qualify for another exclusion for being out of the states for more than 330 days per year. I declare all of my worldwide income and send half of my income directly to my account in the states, no problems.