I heard that the tax can be exempt if your income is below $107,600. Anyone knows if it’s easy to apply for exempt, and how?
I don’t think it’s called exemption. You first need to make above a certain threshold to be taxed, and usually after that, you get tax credits to use in some countries like Taiwan or the UK. The Foreign Housing Exclusion also allows you to deduct a certain amount of housing expenses. Expensive places like London gets more of this.
This site says I can exclude income below $107,600. So it’s automatic (no need to apply)?
You won’t be taxed unless you make above that amount. Even after that amount, most countries get tax credits. And you also have housing expenses that can be deducted off tax liabilities.
If you don’t even make above that threshold, no worries. You do however still need to report your taxes. Uncle Sam and the IRSs reach has expended even more with FATCA.
Are you sure? I thought you didn’t even need to file.
This says you don’t.
I should have been more clear. It is advised you do. I don’t think it’s mandatory but the IRS might start digging around if you don’t in the past.
Toni, how about you expand a little bit on your circumstances, there are other threads available here that are probably good reading.
read up on fatca, FEIE, FBARS, especially fbars.
FEIE is in no way automatic, you need to pass 1 of 2 location requirements, the simplest of which is proving that you were outside any US territory for more than 335 days, I got this wrong the last time we had this discussion, so do yourself a favor and actually read the link you posted. It will be explained there.
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I filled for the first time this year after almost thirty years as an expat so I could get the stimulus check. I figure if I can keep my reported taxable income here at a satisfactory level, the IRS won’t waste their time looking into things more than Taiwan’s tax office does.
I use turbotax and they have a set of questions they ask to establish if you qualify and then there is a line where you list excluded income. We don’t pay on income earned when we’re in Taiwan, which often includes part of a year.
If you don’t owe taxes, you also don’t have to file, so that may be the situation for folk like Wee.
If you don’t owe taxes, you MAY not need to file. You should just do a 2555 foreign earned income exclusion. You’ll need a Schedule 1 and 1040 as well.
Ok, I’ll just let TurboTax take care of it then.