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Question

If I am living abroad, but my family continues to reside in the U.S., for what taxes am I liable?

Submitted: 44 days and 11 hours ago.
Category: Tax
Value: $30
Status: CLOSED
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Optional Information

State/Country relating to question: Egypt

Posted by Mark D 44 days and 11 hours ago.

Info Request

XXXXXXX,

Please describe what family you are talking about. Also, are you a US citizen? Where is your income earned?

Regards,

XXXX X

44 days and 11 hours ago.

Reply

My family includes my wife and three children all of whom would be living in the U.S. for the first year of my employment overseas. I expect my income to be the range of $150,000. Also, I expect to hold on to my primary residence in the U.S. and own another house in the U.S. as well.

I am a U.S. citizen. The job would require me to travel to the U.S. from time to time as well as other countries but I would be living and spending most of my time in Egypt where I would be earning the income.

Posted by Mark D 44 days and 11 hours ago.

Answer

XXXXXXX,

As a citizen, you will continue to have a tax filing requirement, regardless of where your family is located. You would, however, file Form 2555 with your tax return to exclude up to $91,400 (for 2009) of your foreign earned income. In addition, you can claim a foreign tax credit for any foreign taxed paid on Form 1116. You may also continue to take tax deductions for your US residence and for you family members. Please let me know if you have any further questions.

Regards,

XXXX X

44 days and 11 hours ago.

Reply

Am I not liable for the taxes that a firm in the U.S. would be paying on my behalf if I were employed by them. I am thinking of social security taxes but there might be others.

Posted by Mark D 44 days and 11 hours ago.

Info Request

XXXXXXX,

What country are you working in? Is your employer a US person or entity (to include foreign affiliates)? Do you pay foreign Social Security?

Regards,

XXXX X

44 days and 11 hours ago.

Reply

The country is Egypt where I have been told I will pay no taxes so, I am not expecting to pay foreign social security. It is an Egyptian company with no presence in the U.S.

Accepted Answer

Egypt does not have a binational social security agreement. Based off of the other information you have provided, you would not be subject to FICA unless you are considered self-employed. If so, you would be subject to self-employment taxes (calculated on Schedule SE). SE tax is basically FICA for the self-employed. Please let me know if you have any further questions.

Regards,

XXXX X

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Expert: Mark D
Pos. Feedback: 99.6 %
Accepts: 
Answered: 10/7/2009

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MBA, CTEC Registered, CPA Firm Experience with Business and Individual Tax Returns and Issues

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