Quote History Quoted:
335/365 just qualifies for the exemption. To get the full amount, you have to be out of the country 365/365 or else the exemption amount is pro-rated.
View Quote View All Quotes
View All Quotes
Quote History Quoted:
Quoted:
DoD contractor.
not my first rodeo, but definitely this trip is more future oriented vs 12 years ago.
its 335/365 out of the country exempts the first 111k, the remaining portion is taxed normally.
335/365 just
qualifies for the exemption. To get the full amount, you have to be out of the country 365/365 or else the exemption amount is pro-rated.
The proration option is questionable. Technically, it's only applicable in your first and last years of overseas employment when you don't work a full year overseas (unless you managed to start and stop your employment on 01 JAN and 31 DEC). Some tax preparers will on a year-to-year basis, some won't and according to the IRS it isn't.
Just like the bona fide resident option: the IRS has no problem letting you
claim bona fide resident...but somewhere down the road, when they finally get around to auditing you, they decide you weren't a resident...you're screwed.
And it's 330/365 per the IRS,
not including travel days:
IRS: A U.S. citizen or a U.S. resident alien who is physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months.
In reality, the IRS interprets that as 330 days
in the foreign country; time spent traveling (over foreign waters) counts against you.
Additionally, the IRS defines a "day" as 24 consecutive hours, so partial days in a foreign country or out of the U.S. also count against you.
Hey, it's the IRS...did you think it was going to be easy, clearly defined, make sense, fair, etc.?