Taxes while Foreign Based

[User Name]

Does anybody know if a US citizen, foreign based pilot needs to pay taxes on their income? Thanks.

 

[flint4xx]

Depends who you work for and how long you are out of the country. It only applies up to 75k or something in that area.

 

[User Name]

Thanks...I started looking into it with the forms. It doesn't look like I can take advantage in 2005, but maybe 2006.

 

[typhoonpilot]

Does anybody know if a US citizen, foreign based pilot needs to pay taxes on their income? Thanks.

As a U.S. citizen you must declare you global income. If you meet one of two requirements you are able to have up to $80,000 foreign earned income exclusion. Without looking, the form you need is form 2555, " Foreign Earned Income Exlcusion ".

One test is if you are resident in a foreign country for an entire calendar year. the second test is if you are in a foreign country for 330 days out of 365. If you start your foreign work in the middle of a year it would be better to wait until you qualify to file your taxes for 2005. As a foreign resident you have an automatic extension of 2 months to file past April 15.

For example, you move to country XYZ on June 15, 2005. You meet the second test so you can file on June 15, 2006 for a prorated amount of the $80,000 in 2005. If you don't meet the second test, but can meet the first test by the end of 2006, you might need to file 2005 taxes without the deduction and then go back and amend it. It would be best to talk to a good accountant as there are other options.

TP