If working outside the U.S. (physically located outside the U.S. that is) for 330 days during a 12-month consecutive period, then you are eligible for the Foreign Earned Income Exclusion obtained by filing IRS Form 2555. In 2009, the first $91,400 earned overseas is tax-free.
Expats may have to pay taxes in the country where they are working however, but even these taxes can be claimed as a credit (foreign tax credits are claimed on IRS Form 1116) if, indeed, they qualify.
According to Nick Hodges, president of NCH Wealth Advisors, in an article in the January 2010 issue of Financial-Advisor magazine by Jeff Schlegel, "...more developed countries such as the U.K. tend to have higher income taxes than the U.S..."
An Introduction
Hi. Welcome to BourGroup and my blog. Phil
Phil Bour is a CERTIFIED FINANCIAL PLANNER(tm) professional since 2004, a Magna Cum Laude college graduate and an accounting professional for over 35+ years. I love numbers, statistics and economic history.
I am also an Enrolled Agent (EA) to represent taxpayers before the Internal Revenue Service and to prepare tax returns.
"Phil"osophy: I believe that you can manage your money on your own (not necessarily through individual stock selection but through mutual funds, ETF's and other solutions) once you receive some one-time, professional guidance. Why pay annual fees when there may be little added value? For additional information, first read the "An Introduction" label at the left. Then move on to others.
Phil Bour is a CERTIFIED FINANCIAL PLANNER(tm) professional since 2004, a Magna Cum Laude college graduate and an accounting professional for over 35+ years. I love numbers, statistics and economic history.
I am also an Enrolled Agent (EA) to represent taxpayers before the Internal Revenue Service and to prepare tax returns.
"Phil"osophy: I believe that you can manage your money on your own (not necessarily through individual stock selection but through mutual funds, ETF's and other solutions) once you receive some one-time, professional guidance. Why pay annual fees when there may be little added value? For additional information, first read the "An Introduction" label at the left. Then move on to others.