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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
Category: Tax
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Experience:  10 years experience
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As a 1099 employee working over seas, what are my options to

Customer Question

As a 1099 employee working over seas, what are my options to pay as little as possible come tax time?
Submitted: 1 year ago.
Category: Tax
Expert:  Mark Taylor replied 1 year ago.

Hello, my name is Mark. I will be happy to help you with your question. How long have you been overseas? Are all of your earnings from over seas?

Customer: replied 1 year ago.
I have been in Kuwait since 4/9/16. I do not plan to work here any late then 12/15/16. I have earnings from a pervious job in the US the ended in late March.
Expert:  Mark Taylor replied 1 year ago.

To qualify for the foreign earned income exclusion there are several test to see if you qualify One of these test is physical presence. You would need to be in Kuwait for 330 days.

Expert:  Mark Taylor replied 1 year ago.

Unfortunately it sounds like you will not qualify for this exclusion. If you are receiving a 1099, you would report this income on schedule C. You would be able to deduct any expenses that are associated with this income. You may be able to deduct your temporary living expenses.

Customer: replied 1 year ago.
I will not be in Kuwait for 330 days. So, basically I should just plan on handing over 1/3 of my income to the IRS?
Customer: replied 1 year ago.
Silly question-what's the worst that could happen if I do not report this income?
Expert:  Mark Taylor replied 1 year ago.

Unfortunately it sounds like you will not qualify for this exclusion. If you are receiving a 1099, you would report this income on schedule C. You would be able to deduct any expenses that are associated with this income. You may be able to deduct your temporary living expenses.

Expert:  Mark Taylor replied 1 year ago.

Will you pay any tax in Kuwait?

Expert:  Mark Taylor replied 1 year ago.

If you did not report the income you would run the risk of a substantial underpayment penalty of 25% of the unpaid taxes.