Tweet46

I am looking at living and working in New Zealand full time after my retirement from the AF. What taxes would I be responsible for if I were working for a New Zealand company? Obviously I would still owe taxes on my AF retirement income but what about foreign earned income?

Thanks for insight...

Cheers,
JD

mike734

There is a foreign earned income exclusion you can qualify for in two ways. One is by being a bona fide resident of wherever and the other is by being physically present in a country for xxx number of days per year. I think it used to be something like 330 of 365. If you qualify AND you file US tax forms you can exclude about $80,000/year. The amount changes but is generally about that much. You must file to qualify.

The other aspect of the situation is tax treaties. If a country has a tax treaty with the USA it means the IRS will allow you to pay taxes in the country you live and/or the US, whichever is higher. Say you make $200,000/yr in another country. You pay 50% tax in that country and end up with $100,000 net. That would be more than you would pay in the US so you file and prove what you paid and your done. But, if you only paid $20,000 to the local authorities you would be liable for taxes in the US after applying the foreign earned income exclusion (if applicable).

The laws are VERY complicated in practical application so you are well advised to consult an expert. You should start by doing a Google search for expatriate tax law. If you work in another country you are an expatriate.

Good luck.

Tweet46

Thanks, great info!! I'll get researching the regs!!


Cheers,
JD

Typhoonpilot

Search IRS Form 2555, Foreign Earned Income Exclusion.


TP

schwanm

IRD might be able to help you out with this, I'm pretty sure we have a tax treaty with the US.

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