Simple and complicated tax questions for USA tax payers

[tsuiwah]

Did a search and didn't see this covered.

I am doing my USA taxes for the first time since coming to Hong Kong and am not using an accountant. I've always done it myself (for better or worse).

First, a simple question. Whereas we are issued W2s in the States, is there an equivalent document that I need to attach to my 1040 return to identify income earned overseas (whether in Hong Kong or elsewhere)? If there is no documentation, how does the IRS reconcile what I put on my return with my foreign earned income. Should I attach bank deposit statements or the pay slips? I've never had to self report income before, but this is a probably a common question for those with their own businesses. Also, anyone know if foreign income is a flag for an IRS review. I want to keep my clean non-audit record intact and would consider hiring an accountant if necessary.

OK, here's a more complicated question. There isn't a double taxation treaty between Hong Kong and the USA. I haven't done the math yet, but am I ever better off claiming a credit against taxes paid to HK versus the foreign earned income exclusion. I guess this is where I might also need to hire an accountant

Gracias!

[tsuiwah]

Also, another simple question. I will probably move flats in the next year, should I just use my current HK mailing address for the return and then send the IRS a change of address notice once I move or can I use a family member's address in the States?

[penguinsix]

I'm not sure if you can take the FEIE until you live 12 months overseas, which may or may not be an issue.

[tsuiwah]

I'm not sure if you can take the FEIE until you live 12 months overseas, which may or may not be an issue.

Based on my reading of the IRS rules, you can qualify under either the bonafide resident or physical presence tests. For the latter (and possibly the former), you can qualify for a prorated FEIE, as long as you have been out of the country more than 330 days in a 12 month period. The key (again my understanding) is you should not file your tax return until you meet this physical presence test. If that means you postpone filing your return until you qualify then that's fine. However, if you are likely to owe taxes, then obviously, you should pay your estimated taxes first. Otherwise, you will be hit with penalties.

Here's another question.

If you ONLY have foreign earned income on your tax return, can you still make a contribution to your traditional or Roth IRA?