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Anne
Anne, Master Tax Preparer
Category: Tax
Satisfied Customers: 1923
Experience:  Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses
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hi please I need to know how much accurate about earn foreign

Customer Question

hi please I need to know how much accurate about earn foreign income credits ?
Submitted: 1 year ago.
Category: Tax
Expert:  Anne replied 1 year ago.

Anne :

Since you already had a question posted that gave me much more information than this one did, I went back to your original question that was partially answered by another expert.

Anne :

Please refer back to that original question since it had the details I needed.

Anne :

Thank you

Customer:

hi

Customer:

turbo tax soft ware are you familiar with it right ?

Anne :

While I'm not familiar with the turbo tax program , I DO understand foreign income, Form 2555, Form EIC.

Customer:

I have question about my tax return last year and I want it to be sure about I filled the return and I got good amount of credit and I used Turbo Tax software and it says 100 % and low risk of audit and everything were Ok and I was so happy when I filled and I got this credit becuase this is first time I did it by myself last week I had talk with one of experts and he told me that I should not get this credit ,I asked him why , so he explained that I am getting money from overseas and it is earned ( salary ) form foreign company but I should work for them here as expedite get this credit so I got confused , because on Turbo Tax soft ware it doesn't ask me such a question on software interview and I answered all the questions related to my foreign income correctly and I double checked again if I made a mistake but it isnot .
so please I need to answer is he right about this credit that I shouldnot get ?
if he is right what I have to do about that ?


 

Anne :

I have worked with alot of people that use the software (even though I don't) and once they understand the theory they are able to apply that to Turbo Tax

Anne :

Again, as I mentioned, I have already asked you a question on your original posting........Its easier to stay with that posting since it gives me not only the details of your question, but also lets me see what parts of the question the other pro answered...

Customer:

ok I am living in USA the last year and I am alien resident .

Anne :

As I've already explained that we should use the original question........multiple postings for the same question are difficult to keep straight

Customer:

ok say want do you want and I will do it ?

Anne :

I have left a question that I need the answer to on the original question Have you seen it ?

Customer:

no I have not work I got only money .

Customer:

is this the question

Anne :

Please just use the first question you posted.......the repostings of the question only confuses things

Customer:

ok I will pair with first question .

Anne :

good, I left you a question there.....do you see it?

Customer:

yes and I answered to you

Customer:

so

Customer:

stuck with me on that page please ok

Customer:

are you there ?

Customer:

it looks like you are not interested or you dont know what is the answer !!!

Anne :

I can assure you that I am interested.........the fact that you answered me and I didn't see it is precisely why I wanted to get everything on THIS question...........when you post more than 1 question re: the same subject, if you happen to post to one of the other questions.......then I have no way of knowing that...........that's why I asked to use this original question so we will have all of the information in one place

Anne :

I apologize that I did not get your answer.......please repost the answer here

Customer:

and I answered you for your question

Anne :

where did you post it?

Anne :

I'm not in ANY WAY trying to make this more confusing......but your posting doesn't show here

Customer:

the answer is I am getting wages from my employer abroad and I am not working for hime here because the situation of my home country and it is taxable there too

Customer:

so answer me please

Anne :

Thank you.....do you have any children?

Customer:

3 kids

Anne :

all of them your biological ( or adopted) and all 3 under 19?

Customer:

yes

Anne :

That also helps

Customer:

this is not the issue

Customer:

I am talking am i eligible for this money or not ?

Anne :

If you're talking about the Earned Income Credit,the answer is yes

Customer:

up to the turbotax software yes

Anne :

It doesn't really matter that your employer is in another country

Customer:

and incomes that from my foreign employer is it considered for earned income credit

Anne :

yes

Customer:

even If I am expatriate worker for my employer here in us

Anne :

as long as these are wages , and not things like interest or dividends

Customer:

and his company not registered here in us

Customer:

yes it salary which wages right /

Anne :

Then there should be no problem.........you qualify for the Earned Income credit

Customer:

are you sure even if I dont work for him here

Anne :

Yes........US citizens are required to report, and pay tax on world wide income. For Earned Income purposes, it doesn't matter WHERE you

Anne :

W2 comes fom

Customer:

I have not w2 I have statement because tax roles there different .

Anne :

Did you get a 1042S by chance?

Customer:

no

Customer:

what is that ?

Customer:

1042 S

Anne :

please tell me what you do have that proves you worked for the company all year

Anne :

1042S is the foreign equivalent of our W2, but not all foreign companies use this to report income.......its just the most common one I see

Customer:

I have documents says I am working for them , how much salary I get form them per month and net and gross amounts .

Customer:

no my employer didnot

Anne :

Since the documents cover all of the information needed by the IRS , then this is still counted as wages, making you eligible for the EIC

Customer:

what all information required by IRS in document s just to be sure or if you can provide me with link .

Anne :

please give me a minute or 2 to find the link for you

Customer:

ok

Customer:

are you still looking ?

Customer:

are you there ?I felt that you are not interested to answer my question and you could not answer all my questions

Customer:

I am going to rate you , you stepped out and you didn't answer my question and I have one more to finalize the issue and you ask me for 1 or 2 minutes now is 20 minutes you have chance until tomorrow morning you might have trouble with connection I wouldn't like to rank you bad .

Customer:

in case I have been audit would ask for my national passport as proof for how many days I stayed o in or out side in USA , just to make I am receiving income from foreign employer outside USA and I am not working for him here in USA as expatriate , and those wages or salary that I am receiving are taxable there so I am still eligible for earn income credits.

Customer:

if you send me the link That I have been requested , answering Audit passport question ,and you confirm to me I am eligible to EIC

Customer:

then I would rank you

Anne :

Every Expert here strives to give each and every customer great service....I apologize that you seem to think that I'm not interested enough to help you............however, we had high wind warnings all night, and my power did eventually go out.

Anne :

When you receive foreign wages that are not reported on a

Anne :

W2

Anne :

Then you will need to prepare a substitute W2 form f

Anne :

The form asks you for things like your employer's name and address

Anne :

Then you would fill out all of the applicable information on line 7 (a-j)

Anne :

If some of the lines are not applicable to you, then don't put anything there.

Anne :

When the form asks you how you determined the $ amount on line 7 and 8 , (line 8 is not applicable to you) you would explain that these were foreign wages, and that you got the exact $ amount from the documents you were sent in the mail

Anne :

On line 10 where it asks to explain your efforts to obtain the W2, you need only to put "Foreign Employer"

Anne :

Do not send any of the documentation that you received from your employer with your tax return, but keep it with your copy of your tax return, just in case the IRS wants to see it

Anne :

I have prepared tax returns for 28 years, and I have prepared many tax returns with your situation. Just because you have a substitute W2 does not mean that the IRS will want proof.......however, we all know that they choose tax returns at random, and that's why I told you to keep your pay documents with your tax return just in case

Anne :

I sincerely XXXXX XXXXX this information helps

Customer:

thank you for answering me , but you didnot answer me if IRS will gona ask for more details like my national passport or what ever , or just the w2 substitute will be enough instead of my employer statements can you clarify this point please ,

Customer:

also would I need to send this to IRS because when I used the soft ware was not there and I e filled without it .

Customer:

or I just fill it out and keep it with other documents in case as you said ?

Customer:

so just to make sure I am receiving income from foreign employer outside USA( it is small company ) as wages or salary and I am not working for him here in USA as expatriate , and those wages or salary that I am receiving are taxable there and sent to me , so I am eligible for earn income credits from these wages , right ?

Customer:

I have question as general also if I got credit and then I got audit and IRS said we need to get this money what is the consequences

Anne, Master Tax Preparer
Category: Tax
Satisfied Customers: 1923
Experience: Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses
Anne and 6 other Tax Specialists are ready to help you
Customer: replied 1 year ago.

hi please answer me the questions above .

Expert:  Anne replied 1 year ago.
no the irs will not ask for your visa now that you are a resident alien since you didn't include the income in your original return you may need to amend your summation is basically correct my power is back on but my inter net is still down I actually am at a verizon store because I wanted you to know that I really do want to help you However my power is on but my inter net provider is still down as we and many other places had a big wind storm so can se agree that I really want to help you and I will let you know when I have inter net back? I will check back often
Customer: replied 1 year ago.

what is about am I eligible to get credit up to my case because I want to start amending the return and get the money .


 


this is the main question for all our conversations :


so just to make sure I am receiving income from foreign employer outside USA( it is small company ) as wages or salary and I am not working for him here in USA as expatriate , and those wages or salary that I am receiving are taxable there and sent to me , so I am eligible for earn income credits from these wages , right ?

Expert:  Anne replied 1 year ago.
I finally got my server back...........thank heavens

Let me see if we're in agreement.......

You are now a resident Alien for US tax purposes..........However, you keep mention that you are an ex pat.....what country are you an ex pat from? (I'm assuming it is from whatever country you are from, and the country that pays you)

You will need to file

Form 1040X, Amended U.S. Individual Income Tax Return

to include the income from your salary overseas.(Please remember to convert to US$) Then, you may qualify for the Earned Income Credit, based on your total income and the # XXXXX children that live with you (I believe you said 3)

To find out if you qualify for the Earned Income Credit, see pages 56-pg 71 of the 1040 instructions:

Form 1040 Instructions - Internal Revenue Service

You also mentioned that you had to pay tax to your home country on this money. You may claim a credit for part of the taxes that you paid over seas. You do this by filing

Form 1116 - Internal Revenue Service

Everything else I told you above is still correct. You will not send the documentation of your salary, withholdings, etc OTHER than the Substitute W2 form. The documentation you got from the company you need to hold on to.

I truly hope this information is helpful but please do not rate until you are satisfied. If you want to click on 1 or 2 just click on the continue to work with me button instead. You will then be able to add any other info or respond to what I have posted so far. Rating 3-5 gives me credit and a good rating but you can still converse with me.





Customer: replied 1 year ago.

thank you for your answer .

 

do I need a statement form my employer says that I am ex pat here and describe my job or it not important to have or get such document from my employer, do you have experience if IRS request like this document or ask for proof for like such issue because my contract would be terminated soon and in the future I might I wouldn't be able so just tell if it is important or necessary up to you experience.

 

 

Ok let me tell you what I have , I have statements from my employer about income my job , I have job contract , what I need more do you think is enough , but most of my work through the phone and internet I dont not think I have enough proof for that .

Expert:  Anne replied 1 year ago.
The only time you need to show the IRS your passport is to apply for an ITIN or Social Security #. Since you said you were a Resident Alien, I am assuming that you have a SS#

Other than what I described above (SS# or ITIN#) I have never seen the IRS ask for documentation from your employer. If you were Self Employed, then they might wan to look at your records, but since you are receiving wages, and you will be creating a Substitute W2, I think you can relax a little.

Keep the docs with your records, but I honestly think you're fine and I don't expect the IRS to contact you.

I hope this helps
Customer: replied 1 year ago.

Thank I want help about the statements I might get from my employer how should it looks like .


I asked many people I need at least for example sentences because I want may employer to write it in English so do you have such official text that I could send him and he might print it for me on the statement


 


 

Expert:  Anne replied 1 year ago.
You have mentioned numerous times that you have DO have documentation of your salary, what they withheld, etc . Please see below:

"Oak let me tell you what I have , I have statements from my employer about income my job , I have job contract , what I need more do you think is enough , but most of my work through the phone and inter net I don't not think I have enough proof for that ."

"I have documents says I am working for them , how much salary I get form them per month and net and gross amounts ."

I see that you have asked this question before, and each one of us has told you to use the information you have to create a substitute W2 with the information your employer sent you. Here's the link:


Form 4852, Substitute for Form W-2, Wage and Tax Statement ...

Where you are hung up is that IT DOESN'T MATTER HOW the information from your employer .....even in the US different employers use different looking W2 forms......

As long as you have the information need to fill out a substitute W2 then there is NOTHING MORE you need f from your over seas employer.......there is NO blue print on how the IRS wants your employer to document your wages.I work with people from Canada, Pakistan, Iran, Australia, etc.......EACH country has a different way (and paperwork) to record the earnings. However, once I put the earnings, withholdings, etc on the Substitute W2, then, because you have to answer where you got the information to fill out the substitute W2, I state "from country's (I name the country) documentation of wages, etc

All you need to do at this time is create the substitute W2 from the documents you have....the substitute W2 is already in the format that the IRS wants
..
I think you have everything you need and you're going to be fine
Customer: replied 1 year ago.

let me tell you something I chatted with CPA and he told me that I dont need the w2 substitute I know that I am fine but you know all my life I am trying to be prepared I dont like surprises so just to clarify that my employer is foreign employer are you sure that I still I need to fill w2 substitute form 4852 and keep it incase IRS request it because CPA told me it is not works with my case because the employer is not american so who is right you or him ?


 

Customer: replied 1 year ago.
Relist: Inaccurate answer.
Expert:  Lindie-mod replied 1 year ago.

Hello,

I'm Lindie, and I’m a moderator for this topic. I've been working hard to find a professional to assist you right away, but sometimes finding the right professional can take a little longer than expected.

I wonder whether you're ok with continuing to wait for an answer. If you are, please let me know and I will continue my search. If not, feel free to let me know and I will cancel this question for you. Thank you!

Best,

Lindie

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Anne
Anne
Master Tax Preparer
1904 Satisfied Customers
Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses