foreign exclusion

Forum|Forum|6 years ago
March 26, 2020
2 replies
25 views

client has established residence in Ukraine and wants to use the foreign income exclusion to not pay US taxes

I may be wrong but I believe that exclusion is for US citizens earnings from abroad

US income is taxed

Please respond

Thank you

ProSeries Professional

This topic has been closed for replies.

Best answer by BobKamman

No, the foreign tax credit is for US taxpayers who are taxed on the same income by another country.

If you are a U.S. citizen or a resident alien of the United States and you live abroad, you are taxed on your worldwide income. However, you may qualify to exclude your foreign earnings (from work, not from investments or other sources) from income up to an amount that is adjusted annually for inflation ($103,900 for 2018, $105,900 for 2019, and $107,600 for 2020).

George4Tacks

Level 15

1. Is your client a US Citizen?

2. Is the income from outside the US?

There are two possible criteria to exclude foreign income "bona fide resident" is one of them. The other is physical presence.

Something like this might be helpful and you get come CPE for only $10 (or wait until next month and get it free) https://www.cpaacademy.org/self_study_show/a0D2S00000jUR7IUAW

Answers are easy. Questions are hard!

BobKammanAnswer

Level 15

No, the foreign tax credit is for US taxpayers who are taxed on the same income by another country.

If you are a U.S. citizen or a resident alien of the United States and you live abroad, you are taxed on your worldwide income. However, you may qualify to exclude your foreign earnings (from work, not from investments or other sources) from income up to an amount that is adjusted annually for inflation ($103,900 for 2018, $105,900 for 2019, and $107,600 for 2020).

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