foreigners?

[Marcus33 10]

19 hours ago, Gurowake said:

I can very well say that I *am* an expert, at least by certification, and that while what that website said is definitely not wrong, you're misinterpreting it.

Form 2555 is the "Foreign Earned Income Exclusion".  That exclusion requires you meet the requisite standards for actually being considered to not be living in the United States.  There are two ways to fulfill that:

https://en.wikipedia.org/wiki/Bona_fide_resident_test

https://en.wikipedia.org/wiki/Physical_presence_test

That website is referring to the latter, but the former is a bit different in how it works.  If you really care, read the articles I linked.  You can also check out https://www.irs.gov/publications/p54#en_US_2017_publink100047413 for basically all the rules.  The Bona Fide resident test may seem like it requires as much time outside the US as the physical presence test, especially considering years in the middle of a foreign assignment, but there's nothing in the Bona Fide presence test that requires you spend a certain number of days outside the US.  What matters then is where you are a resident of.  You might end up taking business trips to the US often enough to not qualify for the physical presence test, but if you always immediately leave the US after those trips and return to your country of residence, you can still be a Bona Fide resident of a foreign country.

Additionally, that is only the FEIC that I mentioned before.  It does nothing about unearned income* or income above the threshold that I mentioned before, which comprises most of the income of the people the US is intending to tax with its worldwide scheme.  It does mean if you're an average Joe you won't be paying US taxes while working abroad, but that doesn't mean that every single expat just has to stay away to avoid US income taxes.

 

*Meaning interest, dividends, other profits from businesses you do not participate in running, rent received, etc.  Obviously in some sense you earned that money because you invested capital to get that income, but that's not the sense that "earned" means in this case.

Thanks for the info. I don't know how all this works out for my sister, since she is in a different country every month for the most part, but I'm sure her accountants have it covered. For her anyway, if not for everyone as you have said, the exact number of days she spends in the US is crucial.

[Gurowake 3,485]

2 hours ago, Marcus33 said:

Thanks for the info. I don't know how all this works out for my sister, since she is in a different country every month for the most part, but I'm sure her accountants have it covered. For her anyway, if not for everyone as you have said, the exact number of days she spends in the US is crucial.

Yeah, if she's traveling to a new country all the time but has what passes for her permanent residence in the US, or at least doesn't stay any one place long enough for it to be her permanent residence abroad, she needs to be able to qualify for the physical presence test, which does count the number of days, and it definitely would be very important to not mess that up.

[Fukurou 534]

I went to the sumo forum  and a seminar on US tax law broke out

[Gurowake 3,485]

1 minute ago, Fukurou said:

I went to the sumo forum  and a seminar on US tax law broke out

Sorry...always taking my work home with me...

[Fukurou 534]

1 hour ago, Gurowake said:

Sorry...always taking my work home with me...

No no, it's actually interesting to me. Not exactly a subject I'd expect to see here, but informational none the less

[Eikokurai 3,418]

Should this be in the honbasho section? It didn’t seem all that relevant to begin with and even less so now it’s all about taxation.