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Foreign Housing Exclusion
The foreign housing exclusion goes hand-in-hand with the foreign earned income exclusion. According to section 911(a) of the federal tax code, a qualified individual under either the bona fide residence test or the physical presence test will be able to exclude from the gross income the housing amount in a foreign country provided for by the employer. Note that "provided for by the employer" does not require that the employer actually procure the housing. If housing is paid from wages paid by the employer, this will meet the test. However, housing expenses in excess of the wages or earnings from self-employment would not qualify. The tax code defines the "housing amount" as the total of all qualified housing expenses less the "base housing amount." It is important to define what is considered qualified housing expenses as well as what the IRS means by the base housing amount. Qualification In order to qualify, housing expenses must be reasonable expenses incurred by the e ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Foreign Earned Income Exclusion
The United States taxes citizens and residents on their worldwide income. Citizens and residents living and working outside the U.S. may be entitled to a foreign earned income exclusion that reduces taxable income. For 2021, the maximum exclusion is $108,700 per taxpayer (future years indexed for inflation). Taxpayers filing a joint return are entitled to up to two exclusions if both have earned income. In addition, the taxpayer may exclude housing expenses in excess of 16% of this maximum ($47.65 per day in 2021) but with limits. The exclusion is available only for wages or self-employment income earned for services performed outside the U.S. The exclusion is claimed on IRForm 2555 Qualification Only individuals are eligible for the exclusion. To qualify for the exclusion, the taxpayer's tax home must be outside the U.S. In addition, the taxpayer must meet either of two tests: * Bona fide resident test: the taxpayer was a bona fide resident of a foreign country for a period t ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Bona Fide Resident Test
The bona fide residence test, like the physical presence test, comprises one way that an individual can qualify for the foreign earned income exclusion. In order to qualify for the bona fide residence test, an individual needs to reside in a foreign country for an uninterrupted period that includes an entire tax year. In addition, the bona fide residence test takes into account factors such as the individual's intention, the purpose of the trip, and the length and nature of the stay. There are special deductions and exclusions that accompany this only if the individual is a U.S. citizen or U.S. resident alien and has a tax treaty. The bona fide residence is not always the same as the domicile. The domicile is defined as one's permanent home. Example Mike moves to South Africa for work and expects to be there for an indefinite or extended period. Mike has a residence in South Africa for an entire year; his home is still in New York City, and he intends to return here after his sta ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Physical Presence Test
In international taxation, a physical presence test is a rule used to determine tax residence of a natural or legal person. It may rely on having a place of business in the jurisdiction (for legal persons), or remaining in or out of the jurisdiction for a certain number of days each year (for natural persons). Australia The "physical presence in Australia test" is one of the three tests under Australian law through which a charitable institution may be entitled to the income tax-exempt charity endorsement; the others are the "deductible gift recipient test" and the "prescribed by law" test. The two elements of the test are whether the institution has a physical presence in Australia (wholly or through a division, branch, or subdivision) and whether or not the expenditures of an institution are incurred principally in Australia. An institution may still qualify even if its expenditure is not incurred principally in Australia, provided that the amounts expended elsewhere are less th ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Expatriate
An expatriate (often shortened to expat) is a person who resides outside their native country. In common usage, the term often refers to educated professionals, skilled workers, or artists taking positions outside their home country, either independently or sent abroad by their employers. However, the term 'expatriate' is also used for retirees and others who have chosen to live outside their native country. Historically, it has also referred to exiles. Expatriates are immigrants or emigrants who maintain cultural ties such as the language of their country of origin. Etymology The word ''expatriate'' comes from the Latin terms '' ex'' ("out of") and ''patria'' ("native country, fatherland"). Semantics Dictionary definitions for the current meaning of the word include: :Expatriate: :* 'A person who lives outside their native country' (Oxford), or :* 'living in a foreign land' (Webster's). These definitions contrast with those of other words with a similar meaning, such ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Form 1040
Form 1040 (officially, the "U.S. Individual Income Tax Return") is an IRS tax form used for personal federal income tax returns filed by United States residents. The form calculates the total taxable income of the taxpayer and determines how much is to be paid or refunded by the government. Income tax returns for individual calendar year taxpayers are due by Tax Day, which is usually April 15 of the next year, except when April 15 falls on a Saturday, Sunday, or a legal holiday. In those circumstances, the returns are due on the next business day. An automatic extension until October 15 to file Form 1040 can be obtained by filing Form 4868. Form 1040 consists of two pages (23 lines in total) not counting attachments. The first page collects information about the taxpayer(s) and dependents. In particular, the taxpayer specifies his/her filing status on this page. The second page reports income, calculates the allowable deductions and credits, figures the tax due given adjusted in ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Form 2555
Internal Revenue Service (IRS) tax forms are forms used for taxpayers and tax-exempt organizations to report financial information to the Internal Revenue Service of the United States. They are used to report income, calculate taxes to be paid to the federal government, and disclose other information as required by the Internal Revenue Code (IRC). There are over 800 various forms and schedules. Other tax forms in the United States are filed with state and local governments. Individual forms 1040 As of the 2018 tax year, Form 1040, U.S. Individual Income Tax Return, is the only form used for personal (individual) federal income tax returns filed with the IRS. In prior years, it had been one of three forms (1040 he "Long Form" 1040A he "Short Form"and 1040EZ - see below for explanations of each) used for such returns. The first Form 1040 was published for use for the tax years 1913, 1914, and 1915. For 1916, Form 1040 was converted to an annual form (i.e., updated each ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
United States Federal Income Tax
Income taxes in the United States are imposed by the federal government, and most states. The income taxes are determined by applying a tax rate, which may increase as income increases, to taxable income, which is the total income less allowable deductions. Income is broadly defined. Individuals and corporations are directly taxable, and estates and trusts may be taxable on undistributed income. Partnerships are not taxed (with some exceptions in the case of Federal income taxation), but their partners are taxed on their shares of partnership income. Residents and citizens are taxed on worldwide income, while nonresidents are taxed only on income within the jurisdiction. Several types of credits reduce tax, and some types of credits may exceed tax before credits. An alternative tax applies at the federal and some state levels. In the United States, the term "payroll tax" usually refers to FICA taxes that are paid to fund Social Security and Medicare, while "income tax" ref ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
