Foreign Earned Income

[wwizzie]

What is the name of your state? Texas

I know that my income earned in Saudi Arabia is Tax-free but I can't figure out which forms i need to submit to report the earnings. I got so frustrated in 2001 that I just ignored the income. This year I may exceed the allowable credit so I don't think I shoudl ignore it.

Thanks

 

[abezon]

You'll need to fill out form 2555. You can exclude up to $78,000 for 2001 and $80,000 for 2002. You have to include the fair market value of housing provided by your employer unless your employer requires you to live where you do. Since the main employer of foreigners is the Saudi Arabian government which requires foreigners to live in enclaves, most people meet this requirement. You also have to include the value of moving expenses provided by the employer.

For 2002 you'll need to file based on physical presence -- you were in SA for 330 days out fo a 365 day period that includes some part of 2002. Any day you return to the US (vacation, holiday, business visit, etc) does not count towards the 330 day requirement. Days spent visiting other countries on vacation/work do not effect your 330 day totals.