foreign earned income- no exclusion ---HELP!!!


O

ovela

HI all. I really really need help with this!!!!

'm a legal US Resident (i've green card) and I have a job
with a foreign company - a company in a country that doesn;t
have any tax treaty with the US gov. that company pays my
salary in a foreign money and i've to pay taxes in that
country for social security (for that goverment), etc...

I work as a consultant, last year the company sent me to a
project in the US.

Now I have to pay taxes and I don't know what to do.

My income (basically the salary that my employee pays to me
in the foreing country) doesn't qualify for the foreign
income exclusion. (There's no treaty between US and the
country where I have my job and I don't qualify nether bona
fide presence test nor phisical test since I was in the US
all FY 2005).

So I've to pay taxes in USA for the income I received in the
foreign country.. and these are my concerns.

How do I report that income?

I use turbotax to make my taxes, and after answering all the
questions turbotax put the salary in the line 7 (form 1040)
.. but there;s a note in that line stating: Attatch W2 forms.

The 1040 from has a section call Wages, salaries, ..... (7)
where you must put your anual income from salaries... My
question is.... Should I put my salary there? ...I don't get
a w2 form from anybody because my salary is paid for a
foreign company and They're not going to give me that form
(I've a form from the foreign tax office but that is not
valid in US).

It's ok to put my salary there? or I'm going to be object of
an audit because the IRS won't find any w2 related to me.

I cannot use form 2555 because I'm not claiming the
exclusion. so my main concern is how to report the taxes
saying that my income comes from a foreign country.

What happen when you report salaries that are not in any W2
form (in my case all my salaries).

- My other question is, Do I have to pay social security and
medicare taxes? is this an obligation for US citizen and
residents.

Thanks so much

I'm really worry about this and I don't wan to get audit
from the IRS.
 
Last edited by a moderator:
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L

L K Williams

ovela said:
HI all. I really really need help with this!!!!

'm a legal US Resident (i've green card) and I have a job
with a foreign company - a company in a country that doesn;t
have any tax treaty with the US gov. that company pays my
salary in a foreign money and i've to pay taxes in that
country for social security (for that goverment), etc...
snip

The 1040 from has a section call Wages, salaries, ..... (7)
where you must put your anual income from salaries... My
question is.... Should I put my salary there? ...I don't get
a w2 form from anybody because my salary is paid for a
foreign company and They're not going to give me that form
(I've a form from the foreign tax office but that is not
valid in US).

It's ok to put my salary there? or I'm going to be object of
an audit because the IRS won't find any w2 related to me.

I cannot use form 2555 because I'm not claiming the
exclusion. so my main concern is how to report the taxes
saying that my income comes from a foreign country.

What happen when you report salaries that are not in any W2
form (in my case all my salaries).

- My other question is, Do I have to pay social security and
medicare taxes? is this an obligation for US citizen and
residents.

You must report all income, from what ever source. IRS will
not get upset if you report more salaries than they find on
W-2s; they only go after those where it is the other way
around! Since your employer does not report on a W-2, you
do not attach anything to your return, just report the
amount received in Line 7.

If you must pay income tax to the employer's country, you
probably qualify for the Foreign Tax Credit. You use Form
1116 for this purpose.

WARNING! The foreign tax rules are not simple! Your
situation may not be complex but you don't provide enough
information to be certain. It might be worth the cost of
consulting a professional -- if that person has expenience
with this credit. If you do consult someone, be sure to ask
about his/her experience with foreign taxes before engaging
their assistance!

In theory, at least, the foreign tax credit is designed to
avoid double taxation. What is supposed to happen is that
you calculate the tax on your income at the highest
applicable rate and then determine which government gets
paid how much.

Lanny K. Williams, CPA
Nawarat, Williams & Co., Ltd.
Income Tax Services for Expatriate Americans
 
Last edited by a moderator:
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O

ovela

ovela said:
HI all. I really really need help with this!!!!

'm a legal US Resident (i've green card) and I have a job
with a foreign company - a company in a country that doesn;t
have any tax treaty with the US gov. that company pays my
salary in a foreign money and i've to pay taxes in that
country for social security (for that goverment), etc...

I work as a consultant, last year the company sent me to a
project in the US.

Now I have to pay taxes and I don't know what to do.

My income (basically the salary that my employee pays to me
in the foreing country) doesn't qualify for the foreign
income exclusion. (There's no treaty between US and the
country where I have my job and I don't qualify nether bona
fide presence test nor phisical test since I was in the US
all FY 2005).

So I've to pay taxes in USA for the income I received in the
foreign country.. and these are my concerns.

How do I report that income?

I use turbotax to make my taxes, and after answering all the
questions turbotax put the salary in the line 7 (form 1040)
. but there;s a note in that line stating: Attatch W2 forms.

The 1040 from has a section call Wages, salaries, ..... (7)
where you must put your anual income from salaries... My
question is.... Should I put my salary there? ...I don't get
a w2 form from anybody because my salary is paid for a
foreign company and They're not going to give me that form
(I've a form from the foreign tax office but that is not
valid in US).

It's ok to put my salary there? or I'm going to be object of
an audit because the IRS won't find any w2 related to me.

I cannot use form 2555 because I'm not claiming the
exclusion. so my main concern is how to report the taxes
saying that my income comes from a foreign country.

What happen when you report salaries that are not in any W2
form (in my case all my salaries).

- My other question is, Do I have to pay social security and
medicare taxes? is this an obligation for US citizen and
residents.

Thanks so much

I'm really worry about this and I don't wan to get audit
from the IRS.
Ok. I got a response from IRS that says that I have to file
returns for Social Security and Medicare taxes..They 're
saying thta I may be elegible to take credit for my foreign
taxes.

TheY suggest the use of form 4137 to pay the medicare and
social security taxes. that form is for tips but they said
cross over tip word and put Salaries or Wages (t... DO I
have to pay a penalty for those taxes because I didn't have
any withheld from any employee?

How can i know if I'm elegible for tax credits or not. and
which of may tax i can take credit of?

I was withheld all 2005 for Health, Pension and something
they call Income retention (like income tax).... can I only
reduce my income tax paid in a foreign country?

The form to do this is 1116 any expert about that?
 
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