Posts Tagged ‘2006’
Question: What does filing a 673 do for you?
I work overseas and will be here all year of 2009. I filled out a 673 for Physical Presence Test for 09’ also I won’t be going over the 91,400 IRS limit for the year. Can someone with experience with filing taxes explain what this means in layman’s terms. I can read and read about form 673 but don’t real understand what it does. Will this affect the 2555 form I fill out at the end of the year?
Thanks in advance.
Answer: It means you are an optimist.
You truly believe that you will be out of the US for 330 days in 2009, won’t make enough, after the form 2555, to pay any tax and don’t feel like making an interest free loan to the IRS.
Keep in mind, if you MISS the 330 days (even by just one measely day), you will suddenly owe the IRS all of the money that wasn’t withheld. You will also owe an estimated tax penalty (roughly 4%) because it wasn’t withheld during the year. This is “okay” if you can actually write a check and pay off the IRS by April 15th.
This is, in opinion, very risky if you are going to a war zone or are going without friends/family and likely to get homesick. Most people spend what they have, so they can’t suddenly write a check for $5-$10,000 to the IRS. The IRS payment plan runs 9-18% right now.
What is the Earned Income Credit
One of the difficult concepts for rookie tax professionals and the general taxpaying public is the refundable credit. A high-profile example of a refundable credit is the
Question: When does IRS investigate on individual tax?
If one has file 1040 income return tax form in the past 8 or 9 years, but the income is only around like 16k for the pass 3 to 5 years, and last year 26k. Now, this person wants to buy a condo and he’s going to get money as gift from friends and relatives on foreign country that adds up to approximately 150k, would he be in trouble? Is there anything wrong with it?
Answer: If the foreign gifts are more than $100,000, you must file IRS form 3520.
If you have a foreign bank account with more than $10,000, you must file form TDF 90-22.1
As for trouble, you just produce the same gift letters you gave the bank.
UBS Client Receives Five Years’ Probation
A UBS banking client who pleaded guilty to concealing $6.1 million in secret Swiss bank accounts has been sentenced to five years probation, even as the whistleblower who helped expose the UBS tax evasion scheme is set to begin a prison term Friday.
Expatriate IRS Income Tax Problems Can Be Difficult to Solve