It depends.
No - if you are a nonresident alien. However, if you are a nonresident alien and have US source income, you would need to file a Form 1040NR. Form 1040NR is not supported by TurboTax. Here is a link to the IRS website for Form 1040NR, U.S. Nonresident Alien Income Tax Return. Click this link for more information from the IRS on US Tax Guide for Aliens
Yes - if you are a US citizen or resident alien (or you elected to be treated as a US citizen for US tax purposes in a prior year and that election has not been revoked).
If you are a US citizen or resident alien, you are required to file a US federal income tax return to report Worldwide income (in USD). Use this IRS link for more information about US Citizens and Resident Aliens Living Abroad
The Internal Revenue Service has no official exchange rate. The IRS will normally accept any posted exchange rate that is used consistently. You can translate the foreign currency to U.S. dollars using the yearly average currency exchange rate for the tax year. In general, use the exchange rate prevailing (i.e., the spot rate) when you receive, pay or accrue the item. Please refer to the following IRS links for more information about Foreign Currency and Currency Exchange Rates and Yearly Average Currency Exchange Rates
Since you live outside the US, if you meet the
Bona Fide Residence Test
or the
Physical Presence Test
, you will be able to claim an
IRS - Foreign Earned Income Exclusion
that would exclude a portion of your foreign source income (up to $101,300 for 2016). You may also be able to take advantage of the
foreign housing deduction
.
To
enter your foreign earned income in TurboTax, log into your tax return (for TurboTax
Online sign-in, click Here)and type
"foreign earned income" in the search bar then select "jump to
foreign earned income". (Alternatively you can get to this section under
Federal Taxes> Wages and Income>I'll choose what I work on (or jump to
full list or see more income)> Less Common Income (show more)> Foreign Earned Income and
Exclusion). TurboTax will guide you on entering this information.
You will be allowed an automatic 2-month extension if
you are a U.S. citizen or resident alien and on the regular due date of
your return:
- You are living outside of the
United States and Puerto Rico and your main place of business or post of
duty is outside the United States and Puerto Rico, or
- You are in military or naval
service on duty outside the United States and Puerto Rico
The IRS notes that
even if you are allowed an extension, you will have to pay interest on any tax
not paid by the regular due date of your return. So this 2-month extension only
allows you to escape late filing penalties. You will need to attached a
statement to your federal income tax return that states which of these 2
reasons you are claiming as your reason for the 2-month automatic extension
If the April 15th
(April 18th for 2017) deadline is approaching and you feel that you will need
more than 2 months or just to be on the safe side, you can always file a
6-month extension using form before the original tax return deadline.
Use this link for more information about Filing for a 6 month extension in TurboTax
Having a US mailing
address will not affect your claim for the automatic 2-month extension but it
may have an effect on state tax issues if you maintain a residence in the US
while you are abroad.
You can get an extension of time to file your tax
return if you need the time to meet either the bona fide residence test or the
physical presence test to qualify for either the foreign earned income
exclusion or the foreign housing exclusion or deduction. The tests, the
exclusions, and the deduction are explained in Foreign
Earned Income Exclusion.
You should request
an extension of time to file if all three of the following apply:
- You are a U.S. citizen or
resident alien,
- You expect to meet either the
bona fide residence test or the physical presence test, but not until
after your tax return is due, and
- Your tax home is in a foreign
country (or countries) throughout your period of bona fide residence or
physical presence, whichever applies.
Generally, if you
are granted an extension, it will be to 30 days beyond the date on which you
can reasonably expect to qualify under either the bona fide residence test or
the physical presence test. However, if you have moving expenses that are for
services performed in 2 years, you may be granted an extension to 90 days
beyond the close of the year following the year of first arrival in the foreign
country. You may file Form 1040 any time before the extension expires.
How To Get An
Extension
To obtain an
extension, you should file Form
2350, Application for Extension of Time To File U.S. Income Tax Return,
with the Internal Revenue Service office as specified in the instructions for
Form 2350
Please note : If you have foreign bank
accounts, you may be required to file a Report of Foreign Bank and
Financial Accounts (FBAR) if are a US citizen or resident and::
- you had a financial
interest in or signature authority over at least one financial account
located outside of the United States; and
- the aggregate value of all
foreign financial accounts exceeded $10,000 at any time during the
calendar year reported.
To be directed to
the US Treasury Government Website to prepare a Report of Foreign Bank and
Financial Accounts, click FBAR
(TurboTax does not support this form)
