I am an American citizen employed by an American Ca based company and paid out of California. from 2006-2009 I physically worked and lived in Puerto Rico 100%. In 2010 and 2011 I lived and worked in Thailand.... Am I required to pay IRS taxes, even if I was paid out of the US by my Ca, company. I did not pay taxes in Puerto Rico, however I did own a home there. 50% of my pay came from the US and 50% of my pay came from Thailand while i was in Thailand, and I did pay taxes in Thailand.
Whether you are required to pay IRS taxes will depend on the results of your income tax return. Generally, as a US Citizen, you are required to file a Federal Income Tax return annually if you received income during that year. If you were issued a W-2 or 1099 from your employer, your income was reported to the IRS, and if you do not file, the IRS may prepare those returns on your behalf.
As a US Citizen, any income earned in a foreign country is also subject to US taxation. You must report the income that you earned abroad. However, as mentioned by the previous Attorney, there may be exemptions or treaties that would prohibit you from having to pay taxes on the income you earned abroad. In order to determine whether you owe taxes or are required to pay taxes on your total income both earned in the US and abroad, you should consult a CPA to have your tax returns prepared. At that point they will be better able to inform you about your tax obligations.
The information provided is for informational purposes only and no attorney-client relationship has been formed. Attorney Kerriann Sheppard is the Managing Attorney of the Law Offices of Sheppard & Associates, a Taxation Law Firm specializing in helping taxpayers nationwide resolve their IRS back taxes and restoring peace of mind. Call (800)935-9609 for a Free Initial Consultation Today!
Check with a CPA. The answer usually turns on whether or not you were a "tax resident" of the US, or had sufficient nexus to the country. That in turn usually is based on a physical presence test.
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Based on my understanding of the facts, which are not entirely clear, I would say that based on the general principles of the tax code in the US, since you are a US citizen, you are obliged to at the very least, report your worldwide income to the IRS by filing your annual tax return. As an American living abroad you will have the possibility of taking advantage of several deductions including for foreign housing expenses and foreign earned income. A credit will be applied to your US taxes for those you pay abroad. My advice would be to contact a US tax lawyer and accountant. It is also wise to take tax advice from a local expert in the country you are residing (if you are still abroad) to make sure you comply locally.
Due to the lack of complete information provided in relation to the situation discussed, any answer given is general in nature and should not be construed as or relied upon as legal advice. A written legal services agreement must be signed by both the attorney and the client to establish an attorney-client relationship.
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Generally, a U.S. citizen or resident is taxed on his world-wide income. There are certain exceptions to this general rule, including the amount of time you spent in the U.S. and whether your income was "effectively connected with the U.S. trade or business." If you qualify, you can exclude a certain amount of your foreign income from the U.S. tax, but the remaining income (if any) may still be taxable. Moreover, regardless of whether your income is taxable, under certain circumstances, you must report to the IRS your foregn bank accounts and/or your other foreign assets. Overall, your question, while it may sound straightforward, it quite complex, and the answers will depend on the details of your circumstances. I can consult you further on these issues, but I would need to ask you many detailed questions.
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