Foreign income exclusion and tax treaty
Jan 18th 2001, 3:35 am
#1
Guest
Posts: n/a
I've gone through most of Deja's past post and can't seem to find a direct answer to this
: I'm from Malaysia, which has no tax treaty with the US. What are the implications of
declaring my foreign income? Will I be taxed again here, on my foreign earned income even
though I've already paid taxes in Malaysia? Or can we still benefit from foreign income
exclusion, even though there's no tax treaty? I moved here mid- September, have been
jobless since then. If we can still get foreign income exclusion, I see a nice big tax
refund for my husband - and he'll have to take me shopping yippee!!
CF
: I'm from Malaysia, which has no tax treaty with the US. What are the implications of
declaring my foreign income? Will I be taxed again here, on my foreign earned income even
though I've already paid taxes in Malaysia? Or can we still benefit from foreign income
exclusion, even though there's no tax treaty? I moved here mid- September, have been
jobless since then. If we can still get foreign income exclusion, I see a nice big tax
refund for my husband - and he'll have to take me shopping yippee!!
CF
Jan 18th 2001, 12:32 pm
#2
Guest
Posts: n/a
Look into form 2555 (and 2555-EZ) which allows you to exclude income from abroad if:
a) You are a resident for tax purposes (or in your case are filing a joint return with
a resident)
b) Meet the residency restrictions on 2555 which is, more or less, that you've been in the
foreign country (Malaysia) for 330 days in a calendar year (importantly not necessarily
a tax year so you can go September 99 - September 00).
Andy.
--
I'm not really here - it's just your warped imagination.
> I've gone through most of Deja's past post and can't seem to find a direct answer to
> this : I'm from Malaysia, which has no tax treaty with the US. What are the implications
> of declaring my foreign income? Will I be taxed again here, on my foreign earned income
> even though I've already paid taxes in Malaysia? Or can we still benefit from foreign
> income exclusion, even though there's no tax treaty? I moved here mid- September, have
> been jobless since then. If we can still get foreign income exclusion, I see a nice big
> tax refund for my husband - and he'll have to take me shopping yippee!!
>
> CF
a) You are a resident for tax purposes (or in your case are filing a joint return with
a resident)
b) Meet the residency restrictions on 2555 which is, more or less, that you've been in the
foreign country (Malaysia) for 330 days in a calendar year (importantly not necessarily
a tax year so you can go September 99 - September 00).
Andy.
--
I'm not really here - it's just your warped imagination.
> I've gone through most of Deja's past post and can't seem to find a direct answer to
> this : I'm from Malaysia, which has no tax treaty with the US. What are the implications
> of declaring my foreign income? Will I be taxed again here, on my foreign earned income
> even though I've already paid taxes in Malaysia? Or can we still benefit from foreign
> income exclusion, even though there's no tax treaty? I moved here mid- September, have
> been jobless since then. If we can still get foreign income exclusion, I see a nice big
> tax refund for my husband - and he'll have to take me shopping yippee!!
>
> CF
Jan 19th 2001, 4:22 am
#3
Guest
Posts: n/a
a) Yup we're thinking of filing a joint return, and I am already a resident since I'm
IR-1 status.
b) Yup I meet the residency restrictions, was in M'sia 351 days from Oct 1, 99 -
Sept 30, 00.
So even though there's no tax treaty, we won't be taxed on my foreign income? The treaty's
the part that's confusing me. What exactly is it for?
CF
IR-1 status.
b) Yup I meet the residency restrictions, was in M'sia 351 days from Oct 1, 99 -
Sept 30, 00.
So even though there's no tax treaty, we won't be taxed on my foreign income? The treaty's
the part that's confusing me. What exactly is it for?
CF
Jan 19th 2001, 12:11 pm
#4
Guest
Posts: n/a
Let's say you went and worked for six months in another country. Six months isn't long
enough to exclude the income from the US taxes and is probably long enough to trigger
paying taxes in the other country. So you've paid taxes in the other country but the US
wants to tax you on your worldwide income. Are you going to get taxed twice? The idea
about tax treaties is to ensure that you don't and that the appropriate country actually
ends up getting the taxes it is due.
In any case, since the US allowances for overseas income are very generous it's usually
not a problem anyway.
Andy.
--
I'm not really here - it's just your warped imagination.
> a) Yup we're thinking of filing a joint return, and I am already a resident since I'm
> IR-1 status.
> b) Yup I meet the residency restrictions, was in M'sia 351 days from Oct 1, 99 - Sept
> 30, 00.
>
> So even though there's no tax treaty, we won't be taxed on my foreign income? The
> treaty's the part that's confusing me. What exactly is it for?
>
> CF
>
enough to exclude the income from the US taxes and is probably long enough to trigger
paying taxes in the other country. So you've paid taxes in the other country but the US
wants to tax you on your worldwide income. Are you going to get taxed twice? The idea
about tax treaties is to ensure that you don't and that the appropriate country actually
ends up getting the taxes it is due.
In any case, since the US allowances for overseas income are very generous it's usually
not a problem anyway.
Andy.
--
I'm not really here - it's just your warped imagination.
> a) Yup we're thinking of filing a joint return, and I am already a resident since I'm
> IR-1 status.
> b) Yup I meet the residency restrictions, was in M'sia 351 days from Oct 1, 99 - Sept
> 30, 00.
>
> So even though there's no tax treaty, we won't be taxed on my foreign income? The
> treaty's the part that's confusing me. What exactly is it for?
>
> CF
>
Jan 28th 2001, 6:31 am
#5
Guest
Posts: n/a
Andy, thanks for your replies. Just needed to clarify this : I was in Malaysia for 351
days between Jan - Dec 2000, and made about US$15,000 that year, I've been unemployed
since entering the US in Sept. So if we file jointly, I won't be taxed on the worldwide
income (less than $76,000 limit, right?), but we'll get a bigger deduction for married
filing jointly vs filing separately? Thanks in advance for your reply.
CF
In article <[email protected]>,
> Let's say you went and worked for six months in another country. Six
months
> isn't long enough to exclude the income from the US taxes and is
probably
> long enough to trigger paying taxes in the other country. So you've
paid
> taxes in the other country but the US wants to tax you on your
worldwide
> income. Are you going to get taxed twice? The idea about tax treaties
is to
> ensure that you don't and that the appropriate country actually ends
up
> getting the taxes it is due.
>
> In any case, since the US allowances for overseas income are very
generous
> it's usually not a problem anyway.
>
> Andy.
>
> --
> I'm not really here - it's just your warped imagination.
> > a) Yup we're thinking of filing a joint return, and I am already a resident since I'm
> > IR-1 status.
> > b) Yup I meet the residency restrictions, was in M'sia 351 days from Oct 1, 99 - Sept
> > 30, 00.
> >
> > So even though there's no tax treaty, we won't be taxed on my
foreign
> > income? The treaty's the part that's confusing me. What exactly is
it
> > for?
> >
> > CF
> >
> >
> >
days between Jan - Dec 2000, and made about US$15,000 that year, I've been unemployed
since entering the US in Sept. So if we file jointly, I won't be taxed on the worldwide
income (less than $76,000 limit, right?), but we'll get a bigger deduction for married
filing jointly vs filing separately? Thanks in advance for your reply.
CF
In article <[email protected]>,
> Let's say you went and worked for six months in another country. Six
months
> isn't long enough to exclude the income from the US taxes and is
probably
> long enough to trigger paying taxes in the other country. So you've
paid
> taxes in the other country but the US wants to tax you on your
worldwide
> income. Are you going to get taxed twice? The idea about tax treaties
is to
> ensure that you don't and that the appropriate country actually ends
up
> getting the taxes it is due.
>
> In any case, since the US allowances for overseas income are very
generous
> it's usually not a problem anyway.
>
> Andy.
>
> --
> I'm not really here - it's just your warped imagination.
> > a) Yup we're thinking of filing a joint return, and I am already a resident since I'm
> > IR-1 status.
> > b) Yup I meet the residency restrictions, was in M'sia 351 days from Oct 1, 99 - Sept
> > 30, 00.
> >
> > So even though there's no tax treaty, we won't be taxed on my
foreign
> > income? The treaty's the part that's confusing me. What exactly is
it
> > for?
> >
> > CF
> >
> >
> >
Jan 29th 2001, 1:47 pm
#6
Guest
Posts: n/a
So long as you got married in 2000 this is correct.
Andy.
--
I'm not really here - it's just your warped imagination.
> Andy, thanks for your replies. Just needed to clarify this : I was in Malaysia for 351
> days between Jan - Dec 2000, and made about US$15,000 that year, I've been unemployed
> since entering the US in Sept. So if we file jointly, I won't be taxed on the worldwide
> income (less than $76,000 limit, right?), but we'll get a bigger deduction for married
> filing jointly vs filing separately? Thanks in advance for your reply.
>
> CF
>
>
> In article <[email protected]>,
> > Let's say you went and worked for six months in another country. Six
> months
> > isn't long enough to exclude the income from the US taxes and is
> probably
> > long enough to trigger paying taxes in the other country. So you've
> paid
> > taxes in the other country but the US wants to tax you on your
> worldwide
> > income. Are you going to get taxed twice? The idea about tax treaties
> is to
> > ensure that you don't and that the appropriate country actually ends
> up
> > getting the taxes it is due.
> >
> > In any case, since the US allowances for overseas income are very
> generous
> > it's usually not a problem anyway.
> >
> > Andy.
> >
> > --
> > I'm not really here - it's just your warped imagination.
> > > a) Yup we're thinking of filing a joint return, and I am already a resident since
> > > I'm IR-1 status.
> > > b) Yup I meet the residency restrictions, was in M'sia 351 days from Oct 1, 99 -
> > > Sept 30, 00.
> > >
> > > So even though there's no tax treaty, we won't be taxed on my
> foreign
> > > income? The treaty's the part that's confusing me. What exactly is
> it
> > > for?
> > >
> > > CF
> > >
> > >
> > >
> >
> >
Andy.
--
I'm not really here - it's just your warped imagination.
> Andy, thanks for your replies. Just needed to clarify this : I was in Malaysia for 351
> days between Jan - Dec 2000, and made about US$15,000 that year, I've been unemployed
> since entering the US in Sept. So if we file jointly, I won't be taxed on the worldwide
> income (less than $76,000 limit, right?), but we'll get a bigger deduction for married
> filing jointly vs filing separately? Thanks in advance for your reply.
>
> CF
>
>
> In article <[email protected]>,
> > Let's say you went and worked for six months in another country. Six
> months
> > isn't long enough to exclude the income from the US taxes and is
> probably
> > long enough to trigger paying taxes in the other country. So you've
> paid
> > taxes in the other country but the US wants to tax you on your
> worldwide
> > income. Are you going to get taxed twice? The idea about tax treaties
> is to
> > ensure that you don't and that the appropriate country actually ends
> up
> > getting the taxes it is due.
> >
> > In any case, since the US allowances for overseas income are very
> generous
> > it's usually not a problem anyway.
> >
> > Andy.
> >
> > --
> > I'm not really here - it's just your warped imagination.
> > > a) Yup we're thinking of filing a joint return, and I am already a resident since
> > > I'm IR-1 status.
> > > b) Yup I meet the residency restrictions, was in M'sia 351 days from Oct 1, 99 -
> > > Sept 30, 00.
> > >
> > > So even though there's no tax treaty, we won't be taxed on my
> foreign
> > > income? The treaty's the part that's confusing me. What exactly is
> it
> > > for?
> > >
> > > CF
> > >
> > >
> > >
> >
> >
