US Tax & foreign earned income

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  1. #1

    Join Date
    Mar 2008
    Posts
    4

    US Tax & foreign earned income

    I have a funny tax question. I'm American and all of my HK salary falls within the foreign earned income exemption. I have some interest and dividend income from the states but it's less than the standard deduction. Does that mean I don't pay anything because my taxable income is less than the deduction?

    ie - after I subtract my foreign earned exempt income, my AGI (from investment income) is less than $5,000.

    Thank you!


  2. #2

    You probably don't owe any US tax, however you still would need to file your US tax return.

    Tax Information for Individuals

    There is an auto extension (abt 2 months) for overseas taxpayer, however you will need to state clearly on the form that you are taxpayer residing aboard...something similar. For details, you can find it in the 1040 instruction or the above irs website.


  3. #3

    Join Date
    Feb 2007
    Posts
    45

    If you have a housing allowance, is that included in the amount of the standard deduction of approx. 86k USD?

    In other words, if I am getting a housing allowance, do I have to report that as part of salary (even though it is not stated that way by my employer). I havent been.

    From reading this over here, it seems like I don not have to include the housing allowance:

    Foreign Housing Exclusion & Deduction - Foreign Earned Income Exclusion

    But I thought I'd ask the experts here.

    cheers


  4. #4

    Join Date
    Feb 2009
    Location
    Gulf Region, ex Mid-Levels
    Posts
    1,933

    Thanks,

    I have not received a housing allowance and instead had my salary adjusted directly. Have a look at Form 2555, which is the one you use for your foreign earned income exclusion. My assumption* is that you have to add your housing allowance to your pay on line 22 and deduct (and adjust) your housing expenses on lines 28-36.

    If in doubt, speak to a professional.

    Regards,

    FTH

    *Assume may make an ass out of you and me


  5. #5

    Join Date
    Feb 2007
    Posts
    45

    thanks fth, appreciate it. will look into it further with a professional. I should be safe since my allowance actually sucks and doesnt pay for the whole rent