Tax Time

[freshclay]

Advertisement - Members don't see this ad

Wondering if any US citizens working in Oz or more financially astute individuals can help me with tax questions for someone working their intern year.

i.e. Do we have to pay Uncle Sam when we're already paying tax in Australia? My understanding at this point is that our doctor's salary falls under Foreign Earned Income and is thus excluded from US income tax. And I need to do is fill out a Form 2555 on top of the 1040 by April 15th. Is this right? I'm also still confused about claiming housing expenses (in my case, rent). What is the point of claiming it if I'm not paying income tax?

I'm also running this by my financial advisor, but thought I'd hear from anyone out there with personal experience as well.

Thanks!

 

[jaketheory]

Wondering if any US citizens working in Oz or more financially astute individuals can help me with tax questions for someone working their intern year.

i.e. Do we have to pay Uncle Sam when we're already paying tax in Australia? My understanding at this point is that our doctor's salary falls under Foreign Earned Income and is thus excluded from US income tax. And I need to do is fill out a Form 2555 on top of the 1040 by April 15th. Is this right? I'm also still confused about claiming housing expenses (in my case, rent). What is the point of claiming it if I'm not paying income tax?

I'm also running this by my financial advisor, but thought I'd hear from anyone out there with personal experience as well.

Thanks!

how can you claim housing expenses? and if you wouldnt otherwise pay taxes for it anyway, i dont see how it would matter. what, they are going to audit you to tell you owe them $0?

 

[pitman]

On a related matter...assuming you don't have PR, don't forget to apply for Medicare levy exemption to get a few extra grand back.

http://www.medicareaustralia.gov.au...r_medicare_levy_exemption_purposes_011005.pdf

 

[Dr.Millisevert]

Wondering if any US citizens working in Oz or more financially astute individuals can help me with tax questions for someone working their intern year.

i.e. Do we have to pay Uncle Sam when we're already paying tax in Australia? My understanding at this point is that our doctor's salary falls under Foreign Earned Income and is thus excluded from US income tax. And I need to do is fill out a Form 2555 on top of the 1040 by April 15th. Is this right? I'm also still confused about claiming housing expenses (in my case, rent). What is the point of claiming it if I'm not paying income tax?

I'm also running this by my financial advisor, but thought I'd hear from anyone out there with personal experience as well.

Thanks!

as far as I'm aware.. The US is the only country in the entire world that tries to double tax it's citizens who are living/working overseas. Pretty ridiculous if you ask me. I thought that sounded very unamerican when I heard that. Wasn't it a revolution over taxes that was the reason for the formation of the USA as an independant republic in the first place??

If you don't plan on going back to the states permanently to settle. Why don't you just give up your US citizenship after you get your Aus passport. Over the span of your entire career that would save you heaps. You would prob be able to retire if you simply put that into a term savings account.

 

[Raigon]

as far as I'm aware.. The US is the only country in the entire world that tries to double tax it's citizens who are living/working overseas. Pretty ridiculous if you ask me. I thought that sounded very unamerican when I heard that. Wasn't it a revolution over taxes that was the reason for the formation of the USA as an independant republic in the first place??

If you don't plan on going back to the states permanently to settle. Why don't you just give up your US citizenship after you get your Aus passport. Over the span of your entire career that would save you heaps. You would prob be able to retire if you simply put that into a term savings account.

There is also a rule from the IRS that if you make less than 70k a year, you are exempt from tax duties. That's how my dad escaped paying taxes when we moved to Taiwan.

Cheap and dirty, true, but it worked =D. But that's only if you're making less than 70k. Assuming you're a high salary physician, it may be a bit hard to escape from that route. If you're an intern or junior officer, then you may be able to squeeze into that section.

 

[redshifteffect]

If you're an intern or junior officer, then you may be able to squeeze into that section.

Not with the current exchange rate...

 

[Raigon]

Not with the current exchange rate...

Ah damn, I forgot about that. Well, an intern perhaps. Maybe not a junior officer.

 

[redshifteffect]

Ah damn, I forgot about that. Well, an intern perhaps. Maybe not a junior officer.

Possibly in Victoria (lowest base) but not Tassie or WA.

 

[greens]

Fresh Clay,
So I would be right to assume that you worked all or almost all of 2009, so your income was greater than 9,350 USD, hence you have to file taxes. And yes you are right that you need to file both the normal individual tax return (1040) and the foreign income tax return (2555). That is all you need to file. Also if you are living in a foreign country I think the deadline can be extended out to June if needed. You should know that as long as you make under 91,400 USD you won't actually have to pay any money to Uncle Sam. They just want a record of it.

 

[greens]

Oh and one other thing, when you convert your OZ money to USD you can use the average yearly exchange rate and not just the exchange rate on that date. This might help out for this year being that OZ wasn't as high as it is now all year long. I recommend looking on the IRS website if you have any questions. It's what I used when I was filing taxes last year.