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Tue, 30 Jan 2024 17:02:47 -0800

moisture2
from private IP
/all
Haven't paid income tax in over 2 years thanks to FEIE

I live abroad and work remotely for a US employer, so I take advantage of this
IRS exclusion. H&R block signs off on my return and I have yet to be audited.
People keep busting my balls about it but it's 100 % how the rule works and was
meant to prevent doublen taxation. 



https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion


Tue, 30 Jan 2024 18:13:58 -0800

Andy from
private IP
/all
Thanks for playing, but no-- the IRS web page is ambiguous, but the statute is
not.  Under 26 U.S.C. sec. 911(b)(1)(A), foreign-earned income is income earned
"from sources *within* a foreign country."  Working as a digital nomad for a
U.S. employer is clearly taxable as worldwide income of a U.S. citizen who is
merely residing abroad.


Tue, 30 Jan 2024 18:19:41 -0800

moisture2
from private IP
/all
Totally false. WHERE the income comes from is irrelevant as long as you meet the
physical presence test. 

"A U.S. citizen or a U.S. resident alien who is physically present in a foreign
country or countries for at least 330 full days during any period of 12
consecutive months."

Like I said, I haven't paid income tax in 2 years after claiming the FEIE
despite ALL my income coming from the US. 


Tue, 30 Jan 2024 18:23:10 -0800

moisture2
from private IP
/all
" foreign earned income is income you receive for services you perform in a
foreign country"

I performed the services in a foreign country because that's where I was living.
The source of that income is totally irrelevant. 


Tue, 30 Jan 2024 18:25:24 -0800

Andy from
private IP
/all
I should add a vote option for everyone else to weigh in.  Are you sure you want
to post your view of this permanently online with not even an edit feature
implemented yet?  Wow, that takes some balls.


Tue, 30 Jan 2024 18:42:19 -0800

moisture2
from private IP
/all
"FOR THIS PURPOSE, foreign earned income is income you receive for services you
perform in a foreign country in a period during which your tax home is in a
foreign country and you meet either the bona fide residence test or the physical
presence test."


Tue, 30 Jan 2024 18:44:09 -0800

Andy from
private IP
/all
You're relying on the IRS web page and not the actual statute.  The actual
statute is directly against this interpretation.  See here: https://www.law.cornell.edu/uscode/text/26/911


Tue, 30 Jan 2024 18:51:16 -0800

moisture2
from private IP
/all
Read this article by a CPA and professional tax preparer.

https://brighttax.com/blog/irs-foreign-earned-income-exclusion-us-expats-guide/


Tue, 30 Jan 2024 18:56:30 -0800

Andy from
private IP
/all
It says right in the intro "Americans with *foreign-sourced income* can exclude
a substantial amount of their earnings from US taxation."  He didn't discuss the
statute at all.


Wed, 31 Jan 2024 06:20:42 -0800

moisture2
from private IP
/all
Sorry, wrong article. Read this:

"Foreign vs. US Earned Income 
Generally, the IRS classifies income by where it is earned. If you are living
and working abroad, then your income is considered to be foreign earned income,
EVEN IF YOU ARE BEING PAID BY A US COMPANY."

https://www.greenbacktaxservices.com/knowledge-center/tips-updates-foreign-earned-income-exclusion/#:~:text=Generally%2C%20the%20IRS%20classifies%20income,paid%20by%20a%20US%20company.


Wed, 31 Jan 2024 07:05:50 -0800

Wily from
private IP
/all
Moisture2 is correct here - a few expats I know are paid by a US employer to a
US bank account but get the foreign earned income exclusion.  Even if he's
performing US-based online services for a US business, he's technically in a
foreign country while he's doing it, so it still applies for now.


Wed, 31 Jan 2024 08:07:14 -0800

moisture2
from private IP
/all
Wily do they then file a return with the Chinese irs then?


Thu, 01 Feb 2024 04:53:34 -0800

zerosugar
from private IP
/all
good for you. continue living that er expat life. 


Thu, 01 Feb 2024 06:53:09 -0800

Wily from
private IP
/all
They do have to do a local Chinese tax reporting for Chinese based income, and
they need to have some to stay in the country on a work visa, but actually all
foreign income is tax free until you live here for 5+ years without leaving for
3 months or something like that.  So basically it's a pretty nice deal for their
first 100k of USD income. But over that they're definitely paying marginal tax
on since there's no way to hide US payments from the IRS. And these bros def
make more than 120k or whatever, like they're the old school full expat packages
with housing / kids' international school.


Thu, 01 Feb 2024 06:57:15 -0800

Wily from
private IP
/all
There's a lot that's interesting about Chinese tax law, but it's basically
always post tax income. The government doesn't trust you to report anything you
owe so they just withhold the taxes directly from income. Same with VAT taxes on
sales of products or services. So the tax report is basically only to claim
refunds, not to make yourself pay more tax, and you really don't even learn your
effective taxes you paid unless you dig deep or you're the employer.

Pretty sure the US system of self reporting, knowing exactly how much taxes
you've paid, and then paying more is intentionally to make people poltically
more anti-tax.


Sat, 10 Feb 2024 00:09:26 -0800

shithead
from private IP
/all
FEIE for 2023 is $120,000. 

You poor.


Sat, 10 Feb 2024 06:42:29 -0800

moisture2
from private IP
/all
@shitheadTest TCPA settlement income doesn't qualify


Sat, 10 Feb 2024 07:19:02 -0800

shithead
from private IP
/all
You've been working in financial services for how many years, and you're still
not breaking a buck-twenty?

Sux.


Sat, 10 Feb 2024 07:23:12 -0800

moisture2
from private IP
/all
I have 2 contract jobs where I do No Work which leaves time for travel and other
stuff. I could make more but choose not to. 


Sat, 10 Feb 2024 10:56:54 -0800

shithead
from private IP
/all
yeah sure okay
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