topic W4 Witholding Living Overseas in Get your taxes done using TurboTax

W4 Witholding Living Overseas

Raj1 — Mon, 23 Feb 2026 10:49:26 GMT

I live overseas and need to file a W4 for my new employer.

I have 3 dependents over the age of 17, one dependent will be going to college this year. My spouse is not employed.

I prefer to not have any taxes with held from my pay, please advise do I need to enter any numbers in section 3 or 4?

Thanks

Re: W4 Witholding Living Overseas

Anonymous_ — Mon, 16 Jan 2023 16:12:52 GMT

I will page @pk. Check back.

Re: W4 Witholding Living Overseas

JohnB5677 — Mon, 16 Jan 2023 18:03:01 GMT

As a US citizen earning income in a foreign country you are still required to pay income taxes in the United States. My recommendation is to fill the W-4 correctly and have taxes taken out. However, If it is your decision to not have taxes withheld, I suggest that you enter a number on step 4(b) [Deductions] That is equal to your expected income for the year.

Re: W4 Witholding Living Overseas

pk — Mon, 16 Jan 2023 23:58:09 GMT

@Raj1 , I am confused as to need for W-4 when you are abroad --

1. Are you and your family are US persons ( citizen/ GreenCard or what ) ?

2. Where are you now earnings and living -- country ?

3 Your employer is a local entity / US entity / US govt. or what ?

4. or are you saying you are abroad but your family is in the USA ?

I will circle back once I hear from you

Namaste

Re: W4 Witholding Living Overseas

Raj1 — Tue, 17 Jan 2023 09:25:38 GMT

@pk

1- I am a US citizen

2 - Earning and living overseas

3- Employer is US Entity

4 - Me and family are overseas

Re: W4 Witholding Living Overseas

Raj1 — Tue, 17 Jan 2023 09:27:19 GMT

Thanks for the reply.

Do I need to put an amount under section 3 for dependents or only under section 4b?

Re: W4 Witholding Living Overseas

pk — Wed, 18 Jan 2023 00:23:11 GMT

@Raj1

Thank you for your answers to my question(s).

1. Generally , if your tax home is abroad ( i.e. you live and work abroad ), then your earnings in that country , even if paid by a US entity ( other than US govt. or any of its subsidiaries / departments etc. ) are considered foreign earnings ( sourced to the country wherein the work was done/ tax home ).

2. As a US person ( citizen / GreenCard / Resident) you are still taxed by the US on your world income and you still need to participate / contribute to FICA ( the extent however depends on whether the tax-home country has a totalization agreement with the USA or not.

3. If one is to assume that you are employed by US govt (/ subsidiaries etc. ) or you are abroad ONLY for a short period ( i.e. you would not be eligible for foreign earned income exclusion / foreign tax credit / deduction etc. etc. , tax home is still USA ) then the best federal tax withholding estimator is --->

https://www.irs.gov/individuals/tax-withholding-estimator

Note that in this case the employer is still assumed to be participating in shared FICA contribution and you still have to take care of / declare State withholding just as if you were in the USA.

4. More common case is where the employee is assigned to a local subsidiary / entity of the US entity and your tax home is foreign because you will stay abroad long enough to qualify for foreign tax home, foreign earned income exclusion / foreign tax credit/ deduction etc. etc. and may or may not have State taxes to contend with . In such a case , my suggestion would be to use your current W-4 as the best effort ( I recognize that your gross income would change quite a bit from what you were recognizing while in the USA because of the things that your employer would pay while you are abroad. I have been there and I know from personal experience because of the Hypo computations that they go through -- they are trying to make you not to penalized because of foreign assignment plus give some more . I am assuming here that 2023 is your first year of foreign assignment -- it is kind of messy but in the end it all works out.

5. To your specific questions about which areas to fill -- the withholding estimator should help in this . You can also see the W-4 and its instructions here --- > https://www.irs.gov/pub/irs-pdf/fw4.pdf

If this information is not sufficient to clear up your doubts/issues, please can you tell me more about the following -- (a) which country are you located - tax home; (b) when did you arrive there and how long do you expect to be there ; (c) are you a remote worker for a US entity -- perhaps whom used to work in the USA bit have moved abroad but continues to provide services to the US employer; (d) do you have other significant financial connections to USA -- own home ( which state ), bank accounts, investment props ( which state ) etc. etc.

Please if you can answer my questions , I would appreciate that

Namaste