QUESTION
What is the tax laws governing monies earned in a foreign country.
Asked on Mar 03rd, 2012 on Business Law - Pennsylvania
More details to this question:
My husband is working overseas on a contractual basis. He is earning income but does not receive W2''s. We have sent in estimated taxes at a rate advised by a local CPA. We would like to protect as much of that income that is legally allowed, but need some basic info on how to go about that.
1 ANSWER
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The United States taxes its citizens on their worldwide income. As a general matter, U.S. citizens who work abroad are required to pay full U.S. taxes on income earned. There are certain, relatively limited, exclusions and credits to which you may be entitled. Your CPA can assist you in availing yourselves of them. FYI, you must declare any interest in hold in foreign bank accounts to the IRS, so there is no legitimate opportunity to retain these funds in secret outside the country without being deemed an evader.
Answered on Mar 03rd, 2012 at 10:51 AM