If one resides outside de US, while working for a US Airline, is it still required to pay taxes and file tax reports?

Risking sounding naive, my understanding was that if one lives more than half the time abroad you don't have to pay taxes. It could be a tricky distinction in this line of work.

 

There is a lot to it. When I did it you had to "be absent" from the US for at least 330 days out of the year. Tax free earning were capped at 95,000. That 95,000 only includes salary. You must still pay taxes on other earnings such as rental properties, business income, and investments. If you are paying taxes to the foreign country you live in it may offset your US taxes. So lots of stuff you would probably want to speak to a professional about.

 

Short answer, yes. Normal W2 and 1040 apply. The foreign income exception is only when you make your money and live abroad. If you only live abroad and make your money in the us (working there) you will pay federal taxes


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Talk to an accountant. Pilots are some of the most overconfident and often wrong tax "experts" I've ever seen.

 

Yes you need to file and pay taxes on income from a US company.

Unless of course you are rich enough to afford a bunch of lawyers to set up shell accounts in various tax free islands in order to screw over the rest of the country.

 

All US citizens and permanant residence are taxed on all income globally... check out FATCA that was passed in 2010... so living outside the US doesnt save you. The U.S and maybe 1 other country are the only ones that require their citizens to report and pay taxes anywhere on the planet, this also includes reporting of any "offshore accounts". Only way around this with this new law is basically renounce your citizenship... it sucks. So, yes you will report and pay your taxes no matter where you live in the world if you are a US citizen or Green card holder.

 

Misleading. Yes it's all taxable, but you also get about a $100K exclusion for income earned overseas from a foreign company, if you live overseas full-time.

 

Well, since the question was "Are you required to file and report your taxes'? and the answer is YES. So, it is not misleading... you will have to file and report everything and yes everything is taxable, but then there are foreign tax credits and other credits of course, but yes you have to file and yes everything is taxable globally for us citizens. The tax credits only help, but won't bring your tax burden to 0% You will still pay some US taxes depending on your situation. I know this because i have foreign investments and offshore accounts(all legal). Even if you worked in a country with 0% income tax and you are a US citizen the IRS expects their share and you must file and pay US taxes on that income. You must report and the days of hiding money are gone since all governments and banks have to communicate now due to FATCA. This is also why some offshore banks refuse to have US citizens now as customers or raise their min required to deposit in an offshore account.

 

Required to report and file? Yes
Will you owe taxes? Maybe, maybe not?
Flying over international waters counts as being in the US for tax purposes? Yes
Take tax advise from a pilot forum? No

 

Pilots are the biggest numbskulls when it comes to tax advice. One genius suggested to me I can become stateless by renouncing my US citizenship and not owe anyone any taxes since I live overseas. I told him to try it out and let me know how it works out (never heard back).

Bottom line is the IRS wants their fair share of any income you make. There are deductions and certain amounts are exempted if you work overseas (the intention is that they won't double tax you, not give you a free pass on taxes), but you will always be obligated to the IRS to report the income.