Thanks. Lots of good info....

 

Yes, I posted the IRS language on that verbatim here:

http://www.airlinepilotforums.com/mo...tml#post907406

A very close relative is a CPA and Tax Lawyer. Doesn't make me any smarter, which is why I tend to stick to the actual raw data (IRS language) and the results of ACTUAL audits.

If you do not meet the 330 day rule, as the poster suggested, then you MUST meet the residency rule. One of the other.

The bottom line on any of this... there is always somebody who has made a claim on his taxes that I may not think is quite right. Ask the simple question... did it pass an IRS audit?

 

I use the bonafide resident criteria to meet this $91,500 tax exclusion. To meet that isn't just saying I'm a resident elsewhere, because I work there. It means actually being a resident.

Number one in my mind is not having a contract that is "temporary". That means it is an ongoing venture. Signing a one year "I'll fly XYZ airplane" and then go home probably doesn't meet the criteria.

Also, did you maintain a residence in the USA during this period? Or did you rent it out to family members? These are questions that the IRS actually asks in by-mail audits. I posted links to these earlier.

IRS form 9209, "Bonafide Resident / Physical Presence Questionaire"
IRS form 9211, "Foreign Earned Income Exclusion Questionaire"
IRS form 9212

http://www.taxmeless.com/IRS%20Audit...re%2071407.pdf

Also, residency abroad may mean something as basic as paying taxes in the foreign land and having the "green card" for that country. I have a green card, and my contract specifically states that I pay taxes in the foreign land.

A driver's license, phone bill, utilities bills, etc., all are supporting evidence of your residency abroad. I have all these.

 

I am in the same boat with both EU and US citizenship. So if I make $100k a year in my EU country, I will be taxed from that EU country AND the US? If thats the case I'm guessing that would leave me with 30% of my income after taxes?

And how would the US find out about what you made in your other country?

 

Possibility 1: Yes, both. Will be taxed in USA, and probably state and municipal taxes. And taxes in the EU country.

Possibility 2: No, if for some reason that EU country does not tax it's citizens. I don't know of any, by the way. Sometimes contracts are written that the airline will pay any local taxes (my contract is done that way).

Possibility 3: Sure, don't claim the money you earned in an EU country to the IRS. The IRS will NEVER find out. Go for it !!! It's not like those are first world countries doing international banking (and paper trails).

Possibility 4: No, if you renounce your USA citizenship, and stop paying taxes and filing tax forms in the USA. Problem solved. Only pay EU member country taxes (I'd bet that the tax rate in ANY EU country is higher than the USA, by the way).

Possibility 5: No, if you meet all the requirements of 330 days abroad / residency abroad while earning foreign earned income. Then, tax excluded to $91,500 for 2010. You still must file USA taxes every year.

 

Thanks for the info, it's interesting for sure how that could work out. I would rid of my US citizenship before giving up my EU, but I'll worry about that if I cross that road. Only problem I see is if I do try to avoid US taxes if abroad, I fly into the US for an overnight and I get caught up in customs over tax issues.

 

The other solution to your issue is that the taxes you pay in the EU offset you tax liability in the USA. Double taxation is generally not allowed. Check to see the tax treaty between your specific country and the USA. To keep your U.S. citizenship you're gonna need to file a tax return. It's probable that you will not owe any taxes to the USA if you are resident in the EU; have foreign earned income; and pay tax in the EU. You still have to file though.


Typhoonpilot

 

Hi guys.

Thanks for the info in this thread. I am going to be accepting a job over seas that is not a contract gig.. it is a permanent position, and I should be making right around 90k/yr. They will be airline'ing us home while the plane is in scheduled maintenance, which is twice a year for 3 week periods.

So realistically I should be right around 320 days over-seas for the calendar year of 2011. Since I wouldn't qualify for the 330 day abroad exemption, would I be able to qualify for the second one that TonyWilliams posted?.

Is it a "you dont pay any taxes on the first $90k" type thing, or is it just a reduced tax amount?

Thanks!

 

If you get a residence visa for the country you are based in you will be okay, otherwise you are not. You also need to read the language carefully. In an IRS audit you would have to prove that you were "in" a foreign country for 330days of the year. Time in transit between countries does not count so for pilots that one is almost impossible to use unless you are flying domestic or back home every night.

Get advice from a professional though. Nick Romer in Tennessee is pretty good on this stuff.



Typhoonpilot

 

You don't have to come to the USA if you're only 10 days short. Go skiing in the Swiss Alps, or hit the beach in South Africa, shopping in Dubai, or build an igloo in Finland.

Is there any chance you can apply for resident status in the country you plan to work?

The $90k-ish thing is exempt; above that, you pay the taxes.