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Megan C
Megan C , Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 16539
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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For the past 13 years, I have been an ESL (English as a Second

Resolved Question:

For the past 13 years, I have been an ESL (English as a Second Language) teacher. I have worked in SE Asia and currently in Saudi Arabia. For the first 3 years, I filed taxes (federal and state, along with exemptions, that showed a "negative" income. I was way below the level required to pay tax on foreign earned income.

However, I read that there are two criteria for exempt status and if at least one is met, a person is not required to even file taxes. So, I have not filed for the past 10 years. As I understand them, the first is a physical presence in the USA. The second is "intent." If the person's intent is to return to a foreign country, and DOES NOT earn income in the USA, they are not required to file. Am I correct in that assumption? If not, I need to file for the years have missed and pray that I do not have to pay penalties.

I have NOT earned any income in the USA for the past 13 years.

Thank you for your answers and advice.

Respectfully,
Anthony Sanford
Submitted: 2 years ago.
Category: Finance
Expert:  Megan C replied 2 years ago.

Megan C :

Hello, Anthony how are you tonight?

Megan C :

If you are a US citizen, then you must file a tax return regardless of where you earn your income. All income is taxable. There are some benefits such as the foreign earned income exclusion and the foreign tax credit, but you still must file a return

Megan C :

The good news is that if you do not owe tax, there will be no penalties

Megan C :

so, if you earned below the foreign earned income exclusion each year you were overseas this is not a big deal. You will just need to file your missing returns

Megan C :

I would suggest hiring a tax professional that specializes in expat tax issues.

Customer:

Thank you very much. I will definitely be getting my affairs in order. That exclusion clause is not clear at all. Thank you for the help.

Megan C and other Finance Specialists are ready to help you
Expert:  Megan C replied 2 years ago.
Thanks so much for your positive rating. Please come back and visit me any time you have a tax question that needs answered. It was a pleasure working with you today.