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

To correct a mistake of this sort you

If you reside in a country that has

the principal home for the whole

alien spouse as a U.S. resident and

an income tax treaty with the

file a joint income tax return. Once

should prepare Form 1040X. In-

year for your mother or father for

United States, that country may al-

you make the choice, however, you

clude the omitted interest income,

whom you can claim an exemption

low a credit against the tax you owe

must report the worldwide income

(your parent does not have to have

refigure the tax, and send the form

them for the U.S. tax paid on U.S.

of both yourself and your spouse.

lived with you), or

as soon as possible along with any

source income. Nontreaty coun-

additional tax due to the Internal

b) You paid more than half the

Penalties and Interest

tries, depending on their laws, may

Revenue Service Center where

cost of keeping up the home in

give the same type of credit against

you filed your return. Form 1040X

which you lived and in which one of

the tax you owe them for the U.S.

1) Does the June 15 extended

the following also lived for more

can be used to correct an individual

due date for filing my return be-

tax paid on U.S. source income.

than half the year:

Form 1040 income tax return filed

cause both my tax home and my

If double taxation exists and

for any year for which the period of

•

abode are outside the United

Your unmarried child,

you cannot resolve the problem

limitation has not expired (usually 3

States and Puerto Rico on the

grandchild, stepchild, foster

with the tax authorities of the for-

years after the due date of the re-

regular due date relieve me from

child, or adopted child. A fos-

eign country, you can contact the

turn filed, or 2 years after the tax

having to pay interest on tax not

ter child will qualify you for

Internal Revenue Service, Interna-

was paid, whichever is later).

paid by April 15?

this status only if you can

tional Section, P.O. Box 920, Ben-

claim an exemption for the

salem, PA 19020-8518.

6) I am a U.S. citizen and, be-

No. An extension, whether an auto-

child.

cause I expect to qualify for the

matic extension or one requested

10) My total income after claim-

•

foreign earned income exclu-

Your married child,

in writing, does not relieve you of

ing the foreign earned income

sion, all my foreign income

grandchild, stepchild, or

the payment of interest on the tax

and housing exclusions con-

(which consists solely of salary)

adopted child for whom you

due as of April 15 following the year

sists of $5,000 taxable wages.

will be exempt from U.S. tax. Do I

can claim an exemption, or

for which the return is filed. The

Am I entitled to claim the refund-

get any tax benefit from income

for whom you could claim an

able earned income credit?

interest should be included in your

tax I paid on this salary to a for-

exemption except that you

payment.

eign country during the tax

signed a statement allowing

No. If you claim the foreign earned

year?

the noncustodial parent to

2) If I wait to file my return until I

income exclusion, the foreign

qualify for the foreign earned in-

claim the exemption, or the

housing exclusion, or the foreign

No. You cannot take either a tax

come exclusion, I will be

noncustodial parent provides

housing deduction, you cannot

credit or a tax deduction for foreign

charged interest on the U.S. tax I

at least $600 support and

claim the earned income credit.

income taxes paid on income that

will owe. To avoid being charged

claims the exemption under a

is exempt from U.S. tax because of

interest, can I file my return on

11) Last May my employer trans-

pre-1985 agreement.

time, reporting only my taxable

the foreign earned income exclu-

ferred me to our office in Puerto

•

Any relative listed below for

income, excluding my salary for

sion.

Rico. I understand that my salary

whom you can claim an ex-

services abroad that will be ex-

earned in Puerto Rico is tax ex-

empt after I have met the qualifi-

emption.

7) I am a U.S. citizen stationed

empt. Is this correct?

cations?

abroad. I made a personal loan

to a nonresident alien who later

As long as your employer is not the

Parent

Father-in-law

No. If you file a return before you

went bankrupt. Can I claim a bad

Grandparent

Brother-in-law

U.S. Government, all income from

qualify for the exclusion, you must

debt loss for this money?

Brother

Sister-in-law

sources within Puerto Rico is ex-

Half-brother

Half-sister

report all income, including all in-

empt from U.S. tax if you are a

Sister

Son-in-law

come for services performed

Yes. The loss should be reported

bona fide resident of Puerto Rico

Stepbrother

Daughter-in-law, or

abroad, and pay tax on all of it.

as a short-term capital loss on

during the entire tax year. The in-

Stepsister

If related by blood:

After you meet the qualifications,

Schedule D (Form 1040). You have

come you received from Puerto Ri-

Stepmother

— Uncle

you can file a claim for refund by

the burden of proving the validity of

Stepfather

— Aunt

can sources the year you moved to

Mother-in-law

— Nephew

excluding the income earned

the loan, the subsequent bank-

Puerto Rico is not exempt. The tax

— Niece

abroad. If you defer the filing of

ruptcy, and the recovery or

paid to Puerto Rico in the year you

your return, you can avoid interest

nonrecovery from the loan.

moved to Puerto Rico can be

If your spouse was a nonresident

on tax due on your return to be filed

claimed as a foreign tax credit on

alien at any time during the year

by paying the tax you estimate you

8) With which countries does the

Form 1116.

and you do not choose to treat your

will owe with your request for an

United States have tax treaties?

nonresident spouse as a resident

extension of time to file on Form

12) I am a U.S. citizen married to

alien, then you are treated as un-

2350, or by paying enough esti-

a nonresident alien. I believe I

Table 6 – 1 lists those countries

married for head of household pur-

mated tax to cover any tax that you

qualify to use the head of house-

with which the United States has

poses. You must have another

expect will be due on the return.

hold tax rates. Can I use the head

income tax treaties.

qualifying relative and meet the

of household tax rates?

other tests to be eligible to file as

9) I am a retired U.S. citizen living

head of household. You can use

Yes. Although your nonresident

in Europe. My only income is

the head of household column in

alien spouse cannot qualify you as

from U.S. sources on which I pay

the Tax Table or the head of house-

a head of household, you can qual-

U.S. taxes. I am taxed on the

hold Tax Rate Schedule.

ify if (a) or (b) applies:

same income in the foreign

a) You paid more than half the

It may be advantageous to

country where I reside. How do I

avoid double taxation?

cost of keeping up a home that was

choose to treat your nonresident

Chapter 7 How To Get Tax Help

Page 41

Publication 54 - Tax Guide For U.s. Citizens And U.s. Citizens Abroad - 2001 Page 41

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