Living overseas and filing US taxes


A

azulito

I am a US citizen who moved to South America two years ago. I am retired and
my income comes totally from the US [pension plan, social security
retirement,] and an annuity, which I withdrew in full this year [2007.]

Although I live in South America, I also keep a mailing address and a bank
account in New York State; in fact, all my income is deposited in that
checking account. I notified the US Board of Elections to send my election
ballot to South America. I still have my NYS driver license active. During
2007 I visited New York for 12 days only.

I contacted the NYS Taxation Department a year ago and told them about my
living situation and they said that I am not considered a NYS resident,
because I live in South America.

Now, my question is do I have to file NYS taxes again this year or should I
file my Federal tax only? If so, can I use my mailing address in NYS or
should I use my address in South America?

Please instruct. Thank you!

Happy Holidays to y'all!!!
 
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D

dapperdobbs

Depending on NYS law, you owe taxes for their "time of residency"
requirements. I don't know what that is, whether it is "over six
months resident" or something else. I think most states have the "six
month" time frame. To NYS, it doesn't make any difference where you
moved to ... back to Kansas, up to Hong Kong, out to Hawaii, down to
Australia.

For IRS purposes, there used to be a tax break for US residents
abroad, but I believe that was rescinded in 2005 or thereabouts. You
might want to contact an American tax specialist in your current
country of residence to find out if you owe taxes there, in whichever
country you are now calling home. I have no idea how laws vary from
country to country, or the subset of how these apply to US citizens
drawing income from US sources. It seems to me that is what you want
to look at. Large US accounting firms with offices overseas probably
sign corporate clients, but may be willing to give you a consultation
and direct you to a reliable local tax preparer.
 
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R

removeps-groups

Depending on NYS law, you owe taxes for their "time of residency"
requirements. I don't know what that is, whether it is "over six
months resident" or something else. I think most states have the "six
month" time frame. To NYS, it doesn't make any difference where you
moved to ... back to Kansas, up to Hong Kong, out to Hawaii, down to
Australia.
It seems California considers you a resident even if you live abroad
or in another state, because you once lived in California. They're
after the 9.3% or 10.3% state income tax on rich people, and there's
no reason to think that New York is any more generous. See <http://
www.buschfirm.com/articles/tpcArt_avoiding_ca.html> which talks about
how to determine if you are a California resident, and the list
includes things such as your drivers license state, where you are
registered to vote, where you raise your family, etc.

Social security income is free from state taxes so it should not be a
concern for New York state. It is partially taxable at the federal
level (will be fully tax free if your only income is social security
or your taxable and taxfree income is very low like under $25,000).
For IRS purposes, there used to be a tax break for US residents
abroad, but I believe that was rescinded in 2005 or thereabouts. You
might want to contact an American tax specialist in your current
country of residence to find out if you owe taxes there, in whichever
country you are now calling home. I have no idea how laws vary from
country to country, or the subset of how these apply to US citizens
drawing income from US sources. It seems to me that is what you want
to look at. Large US accounting firms with offices overseas probably
sign corporate clients, but may be willing to give you a consultation
and direct you to a reliable local tax preparer.
There still is a tax break. See form 2555 at <http://www.irs.gov/pub/
irs-pdf/f2555.pdf>. You get an exemption of $85,700, or twice that if
married, but only on earned income (not interest, dividends, pensions,
etc). On the remainder you pay US taxes, though it seems you have to
use the higher tax rates to figure the amount. Also, you get a credit
for tax paid to foreign governments that have a double taxation treaty
with the US, and most do. The form for the foreign tax credit is 1116
at <http://www.irs.gov/pub/irs-pdf/f1116.pdf> and it looks pretty
complicated.
 

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