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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 12690
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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If a person worked contract work outside the US while being

Customer Question

if a person worked contract work outside the US while being a non resident (of US) does he have to pay taxes in the US, taxes were paid in the other country.
Submitted: 1 year ago.
Category: Tax
Expert:  Lane replied 1 year ago.

Hi,

...

There are two ways that one may need to pay US taxes:

(1) Having US source income - best exampe of that is earning the income while IN the us

(2) Being a US "tax" resident (U.S. Citizens, green card holders, and thos passing the substantial presence test)

...

If you are a tax residend (US citizren being the most common) you are taxed on ALL worldwide income

...

https://www.irs.gov/businesses/income-from-abroad-is-taxable

...

However, if you HAVE paid tax to another country, you can used the foreign tax credit to offset the double taxation

...

https://www.irs.gov/taxtopics/tc856.html

Expert:  Lane replied 1 year ago.

The foreign tax credit intends to reduce the double tax burden that would otherwise arise when foreign source income is taxed by both the United States and the foreign country from which the income is derived.

Qualifying for the Credit

The tax must meet four tests to qualify for the credit:

  1. The tax must be a legal and actual foreign tax liability
  2. The tax must be imposed on you
  3. You must have paid or accrued the tax, and
  4. The tax must be an income tax (or a tax in lieu of an income tax)
Expert:  Lane replied 1 year ago.

Please let me know if you have any questions at all.

...

If this HAS helped, and you DON’T have other questions … I'd appreciate a positive rating (using the faces or stars on your screen, and then clicking “submit")

JustAnswer will not credit me for the work unless you do.

...

Thank you!

Lane

I have a law degree, (Juris Doctorate), with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in financial accounting & tax, a BBA, and CFP & CRPS designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice, since 1986.

Expert:  Lane replied 1 year ago.

You're very welcome ... Your positive rating … (by using those the stars or faces on your screen, and then clicking “submit”) …is thanks enough!

That's the only way I'll be credited for the work here

...

Thank you,

Lane