2023 Foreign Earned Income

[Todd123]

Yeah, I'm way behind. My W2 from a US Company was $100K. I was working out of the country for this US Company and qualified via the physical test. When I entered the info in Turbo T to create my IRS-2555 the income for total wages shows up as $195,000. Help me make this ,make sense????

[pk]

@Todd123 , 

(a) Which country  is / was your tax home ?

(b) Are you back in the USA ?

(c) When did you enter  that foreign country and  when did you leave that country ( if you are back in the USA ) ?

(d) Do you really mean  that you are filing a 2023 return?  And are you using the 2023 Windows product ?

(e)  You said your foreign  earned income  ( on W-2 )  -- why W-2 ? Were you on a temporary assignment or what ?  Do you mean that US entity did not have a  presence in that country ? Wass the work done in that country ?

(f) Did you pay taxes to that foreign country ?  Was that through a local entity or what ?

AS you see from the above there are a lot of unknowns .    Please answer m my questions and I will circle back.  You can also  PM me if you wish  ( but NO PII -- Personally Identifiable Information ).

Look forward to hearing from you .

[Todd123]

Tax home Trinidad and Tobago

Im back in the US

Entered 2/2020 left 07/2023

Yes, 2023 return. I’ve filed extensions 

Using desktop version Home and Business 

W-2 was the US company that I worked for in Trinidad. Qualified by presence for 2555.

W-2 Company did not have an office in Trinidad. I worked and lived in Trinidad. I paid a withholding tax on the money earned in Trinidad(paid to Trinidad government )and the W-2 company paid withholding on earnings. All earnings were taxed by US and Trinidad. My understanding is there is an agreement between the US and Trinidad. I have only filed a US return. Will I need to file a Trinidad return as well to recover taxes paid in Trinidad?

[AmyC]

Yes, as a resident of Trinidad, you will file that tax return to recover taxes paid- if what you are saying goes with article 3. Here is the treaty for Trinidad. It includes: ARTICLE 3 General Rules of Taxation 1. A resident of one of the Contracting States shall be taxable by the other Contracting State only on income derived from sources within that other Contracting State. For this purpose the rules set forth in Article 5 (Source of Income) shall be applied to determine the source of income. 

I normally see a US resident has earned income elsewhere, files that foreign tax return and then claims a credit on the US return.

The true expert here is pk on these matters.

[pk]

@Todd123 , agreeing with my colleague @AmyC , 

(a0 though I had generally answered your post --  search showed that you had posted another  ( in the same vein )  -- 1116 & 2555 going round and round.

Think I mentioned there that  my concern was really related to US tax deductibility of  your Per-Diem  ( violating ? the one year rule ).   Therefore I asked for more info ( if my memory serves me  correctly )

I also recognize , if, and only if ,  all your compensation in TT consisted of  Per Diem and as  such , excluded from US income, then  why the 2555 or  1116.  So therefore the question as to whether  or not  Per Diem  should be considered  wages. And if so 2555 would exclude this   but US would still impose SECA   ( or FICA  depending on facts  and circumstances )  -- Schedule-SE and Schedule-C.

Please tell me more on this  --please ?

pk