Hey guys, it is not quite tax time but I have been thinking a lot lately about my taxes and did some searching online for my answer. I think I do not qualify but I want to make sure that maybe I am not looking at something wrong and that I could qualify.

So if you are an accountant and know the answer for sure help a brother out!

Since December 2nd 2011 I have been working overseas in Italy and will continue to do so until at least March 2013. During this period in time I only stay for 90 day maximum periods before I have to return home to the U.S. to reset my visa (I don't have a work visa to stay a full year at a time).

I stay home for different periods of time each time, for example I started off working Dec. 2nd for about 2.5 weeks in Dec. 2011 then returned home a few days before Christmas and stayed home until the first week of January (think it was Jan 5th) 2012. I then went to Italy for 90 days and then returned to the U.S. for one month (basically all of April and first few days of May) before returning to Italy for another 90 days on May 5th. In August I went home again for 3 weeks and then returned to Italy on August 25th (for about 2.5 months) in which I will be going home Nov 16th for one week and then go back to Italy Nov 24th until December 15th. I will then stay home again for a few weeks and return to Italy Jan 5th 2013 for 3 months.

Now during all these periods of time I have been home from the 1 full month in April 2012 to the smaller periods of time like 2 weeks in Dec 2011 or the 1 week I am about to do in November and the 3 weeks in August of 2012 I haven't worked a single minute while home.

The law as I think I see it is you have to be out of the country for 330 days without working at home in order to qualify. Now I have that because since Dec 2011 I haven't worked at home but where I don't think I qualify is I believe you have to have 330 days out of 365 days that are consecutive.

These 330 days don't have to be in one calendar year like in my example starting in Dec 2011 and carrying on in to the 2012 year and will still continue in to 2013. But because I was home in the U.S. for 2 weeks in 2011 after my time working overseas started and then 30 days in April 2012 and then another 3 weeks in August and then about to be 1 week in November and then another 3 weeks in December and the first few days of Jan 2013 I don't have "consecutive 330 days."

Am I thinking about this correct? Do I not qualify for the tax exemption even though I will have been working overseas with no work at home for 16 months come next March (2013) because during all this period of time I have all the time at home even though I didn't work? This time at home breaks up the 330 days in 12 consecutive months since the stays at home are to long?

Sure wish I was wrong and I could get all my taxes back when the time comes, but I was hoping for a miracle and maybe I could in fact qualify!

Sorry for the long post, but figured I needed to be as detailed as I could and thanks for any help from people with experience with this and in the know!

 

You can call my acc they are really good and might be of some assistance
727446-0000 tell them jamy gave me your number.

 

Thanks, I will talk to an accountant when the time comes or even when I am back in the states on one of my visits home since tax time is still a good ways away. I actually have a friend who has an accountant for a wife so I can talk to her too. I just had my curiousity of the subject going now so figured I would see if there were any accountants on here that would maybe know.

 

I suspect you will only be exempt from U.S. taxes if you paid taxes in Italy. However, since you have no work visa, I assume you paid no Italian tax. I believe there is a tax treaty between the U.S. and Italy. Check with your accountant or call the IRS. While I have permission to work in Germany, 100% of my income is derived in the U.S.. If I received any income from a German source while in Germany, I would have to pay German tax (43%-49%), however, only that portion of income would be exempt from U.S. tax. In other words, you're gonna' have to pay tax on the income to either Italy or the U.S..

 

No Italian tax, just U.S. and I haven't ever thought I could get the money back due to so many trips home even though not working so really haven't had my hopes up.

It was just the other day that a few people were talking about it and 2 seemed to think I could because they said you are allowed to go home for vacation and said the law is kind of vague, you just need 330 days without working at home. I don't think they realize you have to have 330 days in a 365 consecutive day period though from what I read and they are a little misinformed. They started to get my hopes up though so I figured I would ask Sure would be sweet to get a nice tax return though.

 

 

Its not 330 consectuive days. Its 330 days out of total 12 month period.
Ive worked in Brazil for a couple years on a marina project in Florianopolis

If you are working outside the US, you may be able to qualify for the foreign income exclusion which is up to 80K. Anything above that you pay tax on.

Now to qualify you must meet two qualifications:

1. You must reside in a foreign country for an entire tax year or for at least 330 days during a 12-month period

2. Your salary must be paid by a company or agency in your country of residence or by a U.S. company operating in that country

The following income, received abroad does not qualify:
1. Pay received as a military or civilian employee of the U.S. Government or any of its agencies

2. Pay for services conducted in international waters (not a foreign country)

3. Pay in specific combat zones, as designated by an Executive Order from the President, that is excludable from income

4. Payments received after the end of the tax year following the year in which the services that earned the income were performed

5. The value of meals and lodging that are excluded from income because it was furnished for the convenience of the employer

6. Pension or annuity payments, including social security benefits

Hope that helps
Talk to Shardul, i hear he is handy with a calculator.

 

David,

Although I am a financial controller, I do have a master's in accounting so I remember a few things... The information from Moosejaw is correct. There are many variables but he hit the meat of it in the above post. I think the exclusion has been raised to $95,100 in foreign income from U.S. income tax liability in 2012.

Every situation is different and alot depends with how your employer files. I would speak with an international tax advisor. They should be able to answer your questions easily over the phone.

And even If you do pay foreign income tax, you can apply for a separate U.S. tax credit (using Form 1116) in the amount of foreign income tax you are required to pay.

As with anything, there are loop holes and ways around it. Spend a few bucks and speak with an advisor and you might be very happy come April.

 

Talk to your employer as well.

 

I may have worded it wrong at some point but yeah I understand that it is 330 days out of a one year period. That one year period needs to be consecutive days, so somewhere in that period I have to have the 330 days.

Due to going home for a full month in April on just one of my visits I was already only 5 days away from going under the limit of 330 days (December to December), in which I would then surpass that in August where I went home for another 21 days. I could start my 365 days in say May 2012 after I did the 30 days at home and and make my year May 2012 to May 2013, but then again I would go under the 330 due to my 21 days in August mentioned above, then my 7 days coming up for Thanksgiving and then another 21 days in December for Christmas.

So kinda looks like I am screwed.

I sure hope so! A loop hole would be awesome! I mean I didn't earn any income on U.S. soil since Dec. 2011, so give me a break!