Client is trying to minimize US taxation, but doesn't qualify both tests, been in that country for only 217 consecutives days, so if form 2555 doesn't help, where do I report the taxes he paid in the foreign country? How can I reduce the taxes for that foreign income?
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File the 2019 return when he has hit 330 days in the foreign country. He'll get a prorated foreign income exclusion for 2019, provided he meets the other requirements (tax home?)
Foreign taxes paid on income also taxed by the US goes on Form 1116.
Does he qualify for a partial exclusion? Will he qualify some time in 2020?
He is planning to stay a total of two years, so yes he will work 2020 in that country. He is a US legal Resident, so he's got a permit of two years to work abroad
File the 2019 return when he has hit 330 days in the foreign country. He'll get a prorated foreign income exclusion for 2019, provided he meets the other requirements (tax home?)
Should I ask for an extension to file, and then when the 330 days are over, do the efiling?
Yes. But consider whether claiming the foreign tax credit yields a better result, too. Work the return both ways.
My client began getting foreign earned income on June 18, 2022, do I have to file for an extension throu June 2023 in order to qualify for the foreign Earn Income exclusion?
@blh1218 wrote:
My client began getting foreign earned income on June 18, 2022, do I have to file for an extension throu June 2023 in order to qualify for the foreign Earn Income exclusion?
Yes, you can't file a tax return claiming the Physical Presence Test until they have actually met that 330-day test (so they may qualify in May).
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