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I am considering a job in the Cayman Islands for a hotel Company.

Customer Question
My wife and 15 y.o...
I am considering a job in the Cayman Islands for a hotel Company. My wife and 15 y.o. daughter will not move there, but stay in Phoenix Az. and continue her high school
schooling. I would start the job about April 1st 2011 but would not make more than $65'000 on a yearly basis. My question centers around if I would still be liable for taxes for any of the foriegn earned income. I understand that I must file taxes every year, and In 2011 I know I will file the first 3 months of 2011 from the job I have in Phoenix, but will I have to pay taxes on my foreign income for the rest of 2011 and beyond, even though I live in the Cayman Islands and my family is still make there home in US. ??
Your answer may give me a good indication if it is worth taking this job.
Submitted: 6 years ago.Category: Tax
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Answered in 29 minutes by:
3/2/2011
Tax Professional: Lev, Tax Advisor replied 6 years ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,162
Experience: Taxes, Immigration, Labor Relations
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Hi and welcome to Just Answer!

Because you will be living abroad - you might be entitled for a foreign earned income exclusion. But that exclusion is not granted automatically - you need to file your tax return to get it.

 

For the person to qualify for the foreign earned income exclusion - he/she should:
-- Work and reside outside the United States for at least 330 days during the year(Physical Presence test), or
-- Meet either the Bona Fide test.
If the person qualifies, he/she may exclude up to $92,900 - for 2011 in foreign wages -- plus housing allowances.

Please consider this publication - www.irs.gov/pub/irs-pdf/p54.pdf

If you move - for instance on April 1st 2011 - you might be able to claim the exclusion for 2011 prorated according to days your were in a foreign country during 2011.

Here are forms you likely need:

Form 2555
Instruction 2555
Let me know if you need any help or clarification.
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,162
Experience: Taxes, Immigration, Labor Relations
Verified
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