Advisory Tax Service, Inc.
Frequently Asked Questions - FOREIGN INCOME TAX EXCLUSION ONLY United States taxpayers are eligible for the foreign income tax exclusion. The very first thing to remember despite popular belief is that there are two separate tests to meet in order to claim the foreign income tax exclusion. a) PHYSICAL PRESENCE TEST: The physical presence test easiest of the two test to understand and the hardest to achieve. Basically, if you are out of the United States for 330 days of any 365 day period (For example July 1999 to July 2000) then you do not pay for this time period. b) BONAFIDE RESIDENCE RULE: This is the other test. This is most missed by taxpayers and accountants alike. This test is not one that is spelled out in black and white. What this test tries to prove is that the taxpayer does not have their tax home in the United States. To prove this there are a number of different considerations. Some of which are whether or not the taxpayer is married, has children, a home in the United States, voting, social, civic ties to the surrounding community, or other family matters traveling with the taxpayer. Of
course time spent in the United States is the starting point
for this test. To prove that the taxpayers tax home is not
the United States then the time working in the United States
must be less than 183 (half the year). There are more considerations
and complexities, (see foreign income exclusion questionnaire),
but for most of our clients we are able
steer the taxpayer into qualifying for this test ad therefore
the
foreign income tax exclusion.
|
 |
Yacht
Links www.yachtworld.com/SuperYacht/ The Super Yacht Society .
|
|
|
|
