What is the name of your state (only U.S. law)? I live in Maryland currently.
I have a Hypothetical question below that I am close to making a reality.
I am an American expat, I hold a US passport and I am A citizen of the United States. I do not have a home in the United States. No wife or children. I live abroad in foreign countries and remain off US soil 330 days out of the year. I travel the world living in hostels moving from country to country every 2-12 months.
(what follows is getting a little off topic but I want readers to understand the full scope of my question)
Many countries do not require a visa as long as you only plan on staying for a certain amount of time within their guidelines.(most are 30 to 90 days maximum stay without a visa) Some countries do not require a visa at all if you are a US Citizen (Britain,Belize,Bahamas,canada,Malaysia,New Zealand, just to name a few). Some countries like the Philippines you can apply for a tourist visa and stay for up to one year. Here is a listing of which countries require visas and which do not. visa requirements for countries and guidelines
I earn my income from an assortment of Internet e-commerce websites. All the websites target US-based customers. Customers order products from my website with their credit card and credit cards are processed through a merchant account based in the United States and the funds are deposited into a United States bank account in my business name or my personal name.
Here are my questions
1. Because I have remained off US soil for consecutive 330 days, will I be able to use form 2555 (foreign earned income exclusion) Even though I am working through the internet and my products/services are being sold in the United States?
1B. I have been told elsewhere that the money must be earned in the foreign country to be eligible for foreign earned income exclusion.
How does this scenario change if I remain out of the United States 330days a year and my ecommerce store products are sold and shipped internationally or what if I target only Great Britain for sales, will I be eligible in these two situations?
2. While living in other countries I hire someone I trust within the United States to receive and handle customer's product returns. I also outsource other tasks to workers in the Philippines and/or India, things like search engine optimization to improve Google rankings and customer support responsibilities such as answering customers e-mails and phone calls. Will I be able to claim these business expenses while also taking advantage of the foreign earned income exclusion?
3. Could I be liable to pay taxes in other countries that I have visited with a tourist visa? What might determine that liability?
4. If I make more than (for example let’s say $130k) the foreign earned income exclusion limit of $91,400 (2009) the remainder will be taxed at the percentage rate had I not taken the foreign earned income exclusion for the earned income. To lower this tax liability can I max out my 401K and IRA accounts and only be taxed on the remainder?
I have a Hypothetical question below that I am close to making a reality.
I am an American expat, I hold a US passport and I am A citizen of the United States. I do not have a home in the United States. No wife or children. I live abroad in foreign countries and remain off US soil 330 days out of the year. I travel the world living in hostels moving from country to country every 2-12 months.
(what follows is getting a little off topic but I want readers to understand the full scope of my question)
Many countries do not require a visa as long as you only plan on staying for a certain amount of time within their guidelines.(most are 30 to 90 days maximum stay without a visa) Some countries do not require a visa at all if you are a US Citizen (Britain,Belize,Bahamas,canada,Malaysia,New Zealand, just to name a few). Some countries like the Philippines you can apply for a tourist visa and stay for up to one year. Here is a listing of which countries require visas and which do not. visa requirements for countries and guidelines
I earn my income from an assortment of Internet e-commerce websites. All the websites target US-based customers. Customers order products from my website with their credit card and credit cards are processed through a merchant account based in the United States and the funds are deposited into a United States bank account in my business name or my personal name.
Here are my questions
1. Because I have remained off US soil for consecutive 330 days, will I be able to use form 2555 (foreign earned income exclusion) Even though I am working through the internet and my products/services are being sold in the United States?
1B. I have been told elsewhere that the money must be earned in the foreign country to be eligible for foreign earned income exclusion.
How does this scenario change if I remain out of the United States 330days a year and my ecommerce store products are sold and shipped internationally or what if I target only Great Britain for sales, will I be eligible in these two situations?
2. While living in other countries I hire someone I trust within the United States to receive and handle customer's product returns. I also outsource other tasks to workers in the Philippines and/or India, things like search engine optimization to improve Google rankings and customer support responsibilities such as answering customers e-mails and phone calls. Will I be able to claim these business expenses while also taking advantage of the foreign earned income exclusion?
3. Could I be liable to pay taxes in other countries that I have visited with a tourist visa? What might determine that liability?
4. If I make more than (for example let’s say $130k) the foreign earned income exclusion limit of $91,400 (2009) the remainder will be taxed at the percentage rate had I not taken the foreign earned income exclusion for the earned income. To lower this tax liability can I max out my 401K and IRA accounts and only be taxed on the remainder?