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

Questions and Answers

I required to file a U.S. income

This section answers tax-re-

2350 is a special form for those

benefits of income earned abroad

tax return?

lated questions commonly asked

U.S. citizens or residents abroad

are claimed.

by taxpayers living abroad.

who expect to qualify under either

Yes. All U.S. citizens and resident

11) Does a Form 2555 (or

the bona fide residence test or

2555 – EZ) with a Schedule C or

aliens, depending on the amount of

Filing Requirements —

physical presence test and would

Form W – 2 attached constitute a

the foreign source income, are sub-

Where, When, and How

like to have an extension of time to

return?

ject to U.S. tax on their worldwide

delay filing until after they have

income. If you paid taxes to a for-

qualified.

1) When are U.S. income tax re-

No. The Form 2555 (or 2555 – EZ),

eign government on income from

turns due?

b) If the extension is granted,

Schedule C, and Form W – 2 are

sources outside the United States,

you should file your return after you

merely attachments and do not re-

you may receive a foreign tax credit

Generally, for calendar year tax-

qualify, but by the approved exten-

lieve you of the requirement to file a

against your U.S. income tax liabil-

payers, U.S. income tax returns are

sion date.

Form 1040 to show the sources of

ity for the foreign taxes paid. Form

due on April 15. If you are a U.S.

c) You must file your Form 1040

income reported and the exclu-

1116 is used to figure the allowable

citizen or resident and both your tax

w i t h Fo rm 2 5 5 5 (o r Fo rm

sions or deductions claimed.

credit.

home and your abode are outside

2555 – EZ).

the United States and Puerto Rico

12) On Form 2350, Application

7) I am a U.S. citizen who has

4) My entire income qualifies for

on the regular due date, an auto-

for Extension of Time to File U.S.

retired, and I expect to remain in

the foreign earned income exclu-

matic extension is granted to June

Income Tax Return, I stated that I

a foreign country. Do I have any

sion. Must I file a tax return?

15 for filing the return. Interest will

would qualify under the physical

further U.S. tax obligations?

be charged on any tax due, as

presence test. If I qualify under

Generally. Every U.S. citizen or

shown on the return, from April 15.

the bona fide residence test, can

Your U.S. tax obligation on your

resident must file a U.S. income tax

I file my return on that basis?

income is the same as that of a

return unless total income without

2) Where do I file my U.S. income

retired person living in the United

tax return?

regard to the foreign earned in-

Yes. You can claim the foreign

States. (See the discussion in

come exclusion is below an

earned income exclusion and the

chapter 1 of this publication for fil-

If you claim the foreign earned in-

amount based on filing status. The

foreign housing exclusion or de-

ing requirements.)

come exclusion, the foreign hous-

income levels for filing purposes

duction under either test as long as

ing exclusion, the foreign housing

are discussed under Filing Re-

you meet the qualification require-

8) I have been a bona fide resi-

deduction, or an exclusion of in-

quirements in chapter 1.

ments. You are not bound by the

dent of a foreign country for over

come for bona fide residents of

test indicated in the application for

5 years. Is it necessary for me to

5) I was sent abroad by my com-

American Samoa, you should file

extension of time. You must be

pay estimated tax?

pany in November of last year. I

your return with the:

sure, however, that you file the

plan to secure an extension of

Form 1040 return by the date ap-

U.S. taxpayers overseas have the

time on Form 2350 to file my tax

Internal Revenue Service Center

proved on Form 2350, since a re-

same requirements for paying esti-

Philadelphia, PA 19255-0215.

return for last year because I ex-

turn filed after that date may be

mated tax as those in the United

pect to qualify for the foreign

If you are not claiming one of

subject to a failure to file penalty.

earned income exclusion under

States. See the discussion under

the exclusions or the deduction, but

the physical presence test. How-

Estimated Tax in chapter 1.

If you will not qualify under the

are living in a foreign country or

ever, if my company recalls me

Overseas taxpayers should not

bona fide residence test until a date

U.S. possession and have no legal

to the United States before the

include in their estimated income

later than the extension granted

residence or principal place of busi-

end of the qualifying period and I

any income they receive that is, or

under the physical presence rule,

ness in the United States, you

find I will not qualify for the ex-

will be, exempt from U.S. taxation.

apply for a new extension to a date

should send your return to the ad-

clusion, how and when should I

Overseas taxpayers can deduct

30 days beyond the date you ex-

dress shown above.

file my return?

their estimated housing deduction

pect to qualify as a bona fide resi-

If you are not sure of the place

in figuring their estimated tax.

dent.

If your regular filing date has

of your legal residence and have no

The first installment of esti-

passed, you should file a return,

principal place of business in the

13) I am a U.S. citizen who

mated tax is due on April 15 of the

Form 1040, as soon as possible for

United States, you also can file with

worked in the United States for 6

year for which the tax is paid.

last year. Include a statement with

months last year. I accepted em-

the Philadelphia Service Center.

this return noting that you have re-

ployment overseas in July of last

However, you should not file with

9) Will a check payable in foreign

turned to the United States and will

year and expect to qualify for the

the Philadelphia Service Center if

currency be acceptable in pay-

not qualify for the foreign earned

foreign earned income exclu-

ment of my U.S. tax?

you are a bona fide resident of the

sion. Should I file a return and

income exclusion. You must report

Virgin Islands or a resident of

pay tax on the income earned in

your worldwide income on the re-

Generally, only U.S. currency is ac-

Guam or the Commonwealth of the

the United States during the first

turn. If you paid a foreign tax on the

ceptable for payment of income

Northern Mariana Islands on the

6 months and then, when I qual-

income earned abroad, you may be

tax. However, if you are a Fulbright

last day of your tax year. See the

ify, file another return covering

able to either deduct this tax or

grantee, see the discussion under

discussion in chapter 1.

the last 6 months of the year?

claim it as a credit against your

Fulbright grants in chapter 1.

U.S. income tax.

3) I am going abroad this year

No. You have the choice of one of

and expect to qualify for the for-

However, if you pay the tax due

10) I have met the test for physi-

the following two methods of filing

eign earned income exclusion.

cal presence in a foreign country

after the regular due date, interest

your return:

How can I secure an extension of

and am filing returns for 2 years.

will be charged from the regular

a) You can file your return when

time to file my return, when

Must I file a separate Form 2555

due date until the date the tax is

due under the regular filing rules,

should I file my return, and what

(or Form 2555 – EZ) with each re-

paid.

forms are required?

turn?

report all your income without ex-

cluding your foreign earned in-

6) I am a U.S. citizen and have no

a) You should file Form 2350 by the

Yes. A Form 2555 (or Form

come, and pay the tax due. After

taxable income from the United

due date of your return to request

2555 – EZ) must be filed with each

you have qualified for the exclu-

States, but I have substantial in-

an extension of time to file. Form

come from a foreign source. Am

Form 1040 tax return on which the

sion, you can file an amended re-

Chapter 7 How To Get Tax Help

Page 37

Publication 54 - Tax Guide For U.s. Citizens And U.s. Citizens Abroad - 2001 Page 37

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