Publication 54 - Tax Guide For U.s. Citizens And U.s. Citizens Abroad

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earned income that you may be able to exclude

How to report your income if it is paid in

Questions and answers. Frequently asked

from your U.S. gross income has increased to

foreign currency,

questions and answers to those questions are

$78,000. The foreign earned income exclusion

presented in the back of the publication.

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How to determine your filing status if your

is discussed in chapter 4.

spouse is a nonresident alien, and

Comments and suggestions. We welcome

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your comments about this publication and your

Whether you must pay estimated tax.

suggestions for future editions.

If you own stock in a foreign corporation or have

Important Reminders

You can e-mail us while visiting our web site

an interest in a foreign partnership, you may

have to file information returns. See the instruc-

You can write to us at the following address:

Social security numbers for dependents.

tions under Information Returns and Reports in

You generally must list on Form 1040 or Form

chapter 1.

Internal Revenue Service

1040A the social security number (SSN) of any

Technical Publications Branch

person for whom you claim an exemption. See

Withholding tax. Chapter 2 discusses the

W:CAR:MP:FP:P

Social security number under Exemptions in

withholding of income, social security, and Medi-

1111 Constitution Ave. NW

chapter 5.

care taxes from the pay of U.S. citizens and

Washington, DC 20224

resident aliens. It will help you determine if the

Form 2555 – EZ. Instead of the longer Form

correct amounts of taxes are being withheld and

We respond to many letters by telephone.

2555, Foreign Earned Income, you may be able

how to adjust your withholding if too much or too

Therefore, it would be helpful if you would in-

to file Form 2555 – EZ, Foreign Earned Income

little is being withheld.

clude your daytime phone number, including the

Exclusion, if:

area code, in your correspondence.

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Self-employment tax. Chapter 3 discusses

Your foreign earned income for the year

who must pay self-employment tax.

was $78,000 or less, and

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Foreign earned income exclusion and hous-

Your return is not for a short year.

ing exclusion and deduction. Chapter 4 dis-

cusses income tax benefits that apply if you

Form 2555 – EZ has fewer lines than Form

meet certain requirements while living abroad.

2555. For more information, see Form 2555 – EZ

You may qualify to treat up to $78,000 of your

in chapter 4.

income as not taxable by the United States. You

Foreign income tax withheld. If your em-

may also be able to either deduct part of your

Filing

ployer withheld foreign taxes from your pay, you

housing expenses from your income or treat a

cannot claim those taxes on your U.S. income

limited amount of income used for housing ex-

tax return as federal income tax withheld.

penses as not taxable by the United States.

Information

You may be able to claim a foreign tax credit

These benefits are called the foreign earned

or a foreign tax deduction based on the amount

income exclusion and the foreign housing de-

withheld and paid to a foreign tax authority.

duction and exclusion.

For more information about foreign taxes,

To qualify for either of the exclusions or the

Topics

see Taxes of Foreign Countries and U.S. Pos-

deduction, you must have a tax home in a for-

This chapter discusses:

sessions in chapter 5.

eign country and earn income from personal

services performed in a foreign country. These

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Whether you have to file a return,

Change of address. If you change your mail-

rules are explained in chapter 4.

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ing address, be sure to notify the Internal Reve-

If you are going to exclude or deduct your

When to file your return and pay any tax

nue Service using Form 8822, Change of

income as discussed above, you must file Form

due,

Address. If you are changing both your home

2555 or Form 2555 – EZ. You will find an exam-

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How to treat foreign currency,

and business addresses, you need to complete

ple with filled-in Forms 2555 and 2555 – EZ in

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two forms.

this publication.

Where to file your return,

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Photographs of missing children. The Inter-

When you can treat your nonresident

Exemptions, deductions, and credits.

nal Revenue Service is a proud partner with the

spouse as a resident,

Chapter 5 discusses exemptions, deductions,

National Center for Missing and Exploited Chil-

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and credits you may be able to claim on your

When you may have to make estimated

dren. Photographs of missing children selected

return. These are generally the same as if you

tax payments, and

by the Center may appear in this publication on

were living in the United States. However, if you

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pages that would otherwise be blank. You can

Information returns and reports you may

choose to exclude foreign earned income or

help bring these children home by looking at the

have to file.

housing amounts, you cannot deduct or exclude

photographs and calling 1 – 800 – THE – LOST

any item or take a credit for any item that is

(1 – 800 – 843 – 5678) if you recognize a child.

related to the amounts you exclude. Among the

Useful Items

topics discussed in chapter 5 are:

You may want to see:

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Exemptions you can claim,

Introduction

Publication

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Contributions you can deduct,

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Armed Forces’ Tax Guide

This publication discusses special tax rules for

Moving expenses you can deduct, and

U.S. citizens and resident aliens who work

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501

Exemptions, Standard Deduction,

Foreign taxes you can either deduct or

abroad or who have income earned in foreign

and Filing Information

take a credit for.

countries. As a U.S. citizen or resident alien,

505

Tax Withholding and Estimated

your worldwide income generally is subject to

Tax

U.S. income tax, regardless of where you are

Tax treaty benefits. Chapter 6 discusses

living. Also, you are subject to the same income

some benefits that are common to most tax

519

U.S. Tax Guide for Aliens

tax filing requirements that apply to U.S. citizens

treaties and explains how to get help if you think

520

Scholarships and Fellowships

or residents living in the United States.

you are not getting a treaty benefit to which you

are entitled. It also explains how to get copies of

Form (and Instructions)

Filing information. Chapter 1 contains gen-

tax treaties.

eral filing information, such as:

1040 – ES

Estimated Tax for Individuals

How to get tax help. Chapter 7 is an explana-

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Whether you must file a U.S. tax return,

tion of how to get information and assistance

1040X

Amended U.S. Individual Income

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When and where to file your return,

from the IRS.

Tax Return

Page 2

Chapter 1 Filing Information

Publication 54 - Tax Guide For U.s. Citizens And U.s. Citizens Abroad - 2001 Page 2

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