US citizen working in US partial year and then abroad

jxd — Sat, 01 Jun 2019 15:45:25 GMT

I am US citizen and worked in US from Jan to end March 2018, then I changed my job to work in China from April to end of Dec 2018. I received W-2 for the salary of Jan - March 2018 in US dollar. Then I received salary in China currency without a W-2 from April to Dec. The salary in China was directly deposited into my bank account (China Bank). The salary in China was taxed by China Government. Should I pay a reduced tax in US? How should I report my income in turbo tax (home and business version)? How to reduce the tax to be paid to IRS? Should I report the bank account (FBAR) as well? how to report?

Yes, you will pay a reduced tax in the US by utilizing th...

KarenJ — Sat, 01 Jun 2019 15:45:26 GMT

Yes, you will pay a reduced tax in the US by utilizing the foreign tax credit and/or the foreign earned income exclusion. Please see below the instructions for entering this information into TurboTax. Yes, you probably need to report the FBAR if it applies to you . You also may have an additional foreign filing requirement, Form 8938. https://www.irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements

The foreign earned income exclusion will only apply to you if you had no more than 35 days back in the US (for any reason) in a 12 month period. It can be any 12 month period. So say you were in a foreign country for at least 330 between April 15, 2018 and April 14 2019 (no more than 35 days back in the US during that time), then you can receive a partial exclusion of foreign income (as you were only overseas for part of the 2018 tax year). The full year exclusion for 2018 is $103,900. Please see the following Publication for more information:

Tax Guide for US Citizens Abroad 2018

If you do not meet the requirements for the foreign earned income exclusion, you can use the foreign tax credit on your US tax return to help offset double taxation.

Your foreign tax credit cannot be more than your total U.S. tax liability multiplied by a fraction. The numerator of the fraction is your taxable income from sources outside the United States. The denominator is your total taxable income from U.S. and foreign sources.

If you have foreign taxes available for credit but you cannot use them because of the foreign tax credit limit, you may be able to carry them back to the previous tax year and forward to the next 10 tax years. Refer to Carryback and Carryover in Publication 514, Foreign Tax Credit for Individuals.

To enter your Chinese wages, go to the foreign earned income exclusion section of TurboTax. Enter foreign income in the search bar at the top of your screen and click on Jump to foreign income.

On the second screen, you should check that you received a statement from your foreign employer.

Then go through and respond to the questions. If you do not meet the requirements for the foreign earned income exclusion, the form will be deleted but it will not delete your foreign wages that were not reported on a W-2.

Then you can go to the foreign tax credit section. Type in foreign tax credit in the search bar at the top of the screen and click Jump to foreign tax credit.

The first part is all about foreign dividends, click through and answer the screens if they apply and then when you get to a screen asking Income type, click on General Category Income. Add China as a country and enter a description and gross wages from China. Continue through the screens answering and you will come to a screen for Foreign Taxes Paid - China. Enter your foreign taxes in the Other Income Box. Then continue through the screens until done.

topic US citizen working in US partial year and then abroad in Deductions & credits

US citizen working in US partial year and then abroad

Yes, you will pay a reduced tax in the US by utilizing th...