2555 Multiple Employers and Housing Status

[dornstein22]

I have been working in a foreign country for more than a decade.  Half way through last year I moved to another foreign country, changing my employer AND changing from an owner to a renter.

I believe 2555 only permits me to choose one, not both, of those countries and housing options.

Any suggestion how to address a switch from one foreign employer in one country to another foreign employer in another foreign country, and accurately report that I owned a home in the first country, but rented in the second?

[pk]

@dornstein22 , 2555  generally is  geared to distinguish between  US and  "abroad / foreign"  for purposes of  qualifying  your tax home as foreign and allowing  foreign earned income exclusion.   So for your  scenario, use the  country / employer you are with at the end of the year and show just trips to the USA and foreign  countries as asked  for  on form 2555.

Owning a home or renting  generally is not a tax event -- unless you are saying that your family is staying in your home in   country #1 and  you are in a different  country #2.  If that is the case  then you report on  form 2555  country #1 as your tax home ( foreign ) and that you are working in a different  country  is not tax important ( unless  your cost of living differential and  housing differential  are of consequence ).  In such  a case  ( once I have  details from you ),  will need to do a little more research on the  IRS rulings  / case law

Does this answer your query ?

[dornstein22]

@pk Thank you!  Allow me to please specify the rows that are causing my confusion. Again, I have been living in Hong Kong for more than a decade, but then in April of 2019 I moved to Singapore for a new employer.  I was (and still) own in Hong Kong, and I rent in Singapore.

Form 2555, Row 3, seeks my employer's name.  Since I had two employers (one in Hong Kong, and then after I moved another one in Singapore), you are suggesting I only include the employer in Singapore on Row 3, correct?    

Row 10 asks date of residence commencement.  Would I include my HKG commencement or Singapore commencement?

Row 11 asks whether I rented or owned.  Would I enter the status only at the end of the year (Singapore, rent)?  I think the implication of this choice drives what I would enter for 

row 28 (which is about renting, not owning).

Row 19 - this is where the income is included:  would I take the income from my HKG and SG employment together and enter them into this one line?

[KarenJ2]

Yes,. just enter your current employer information in Singapore

Date of Residence commencement would be the date your arrived in HK- when you first started your foreign assignment overseas

For the rental question, please enter rental for your rental in Singapore

Yes, total your HK and Singapore wages and enter the total as your 2019 foreign wages.

[cectaxesnz]

I have a similar question.

I have a main employee, a University in NZ, where I'm on a casual contract with and have been earning since June 2019. In Sept I took a roll as a freelance research consultant, with a company in Japan, and have earned a bit of money. I pay tax on all my income in NZ. I have previously filed the 2555 5 years, but just want to be sure that I am doing it right.

If I have more than one employer, The University and Japanese company, do I fill out on 2555 with my main employer - but all my foreign  earned income (from both)? Or can you fill out more than one 2555. I am finding the process very confusing.

[pk]

@cectaxesnz , assuming that you are US citizen/Resident ( Green Card ), the fact that you are having different incomes  and from different countries does not matter in filling out form 2555.  All you need to show is  your travels during the test period   ( probably 01/01/2019 through  12/31/2019 , since you have been filing 2555 for the last five years ).  During the  foreign income interview   you have to make sure your total foreign income is accounted for.  Also since you are self-employed ( in Japan ), you would have to fill out Schedule-C recognizing the gross income and the associated / allowable expenses.  Note that this will result in  Self-Employment taxes   ( equivalent to FICA that US wage earners pay ) to be levied.  You have to make sure that the total foreign earnings are correct  ( i.e. from both NZ and Japan ).

But just ONE form 2555

Do you need more help

[SusanY1]

You can only file one form 2555.  You may list either employer as your employer on the form (generally, I suggest the one where you earned the most income.)   You will combine the income earned from both when reporting your income. 

However, if you lived in more than one location, you can make adjustments to the housing allowance portion of the exclusion to account for more than one location if the locations have housing allowance that are greater than the standard housing allowance.

In the housing allowance section of TurboTax, after you select your first location click on the blue button "Another Location" and then enter the number of days in which you resided at the second location.  TurboTax will prorate the amount based on the days at each location for you.  

[kagemusha]

Not sure if this thread will still be answered. What if I am both self employed but have another job who provides me T4s (equivalent to a US W2 form)? I have mainly been self-employed but get a significant amount of money from the other job. Can I still just say "self-employed"?

Thanks!

[pk]

@kagemusha , yes.

Is there more I can do for you ?

[LeonardS]

No, you should not just say  "self-employed" for all your income.  If you include the significant amount of money from your equivalent W-2 that money will be subject to self-employment tax. You will use Form 2555 Foreign Income to claim the Foreign Earned Income Exclusion (FEIE).  You will report your W-2 equivalent wages,  in Part IV  Line 19 Total wages, salaries, bonuses, commissions, etc. . Form 2555.

To report your foreign income on Form 2555 in TurboTax follow these steps:

1. Sign in to your account if it is not open
2. Enter Foreign income in the search box
3. Click Jump to foreign income in the results box
4. On the page Did You Make Any Money Outside the United States? check yes
5. Follow the screen prompts to enter your information

TurboTax will ask for the dates when you worked/resided outside of the US to verify that you qualify for the FEIE either as a bonified resident or by the physical presence test.  

Edited [March 13, 2022 | 12:20 pm PDT]

@kagemusha

[pk]

@kagemusha  assuming that you are  a US person ( citizen/Green Card ) , having a tax home in a foreign country, employed  and also self-employed -- for US tax purposes,  self-employed or employed , the SECA taxes may apply no matter what ---   for the  employed portion of income  SECA depends on whether  there is a totalization agreement  between US and  the foreign country and  the conditions therein.     On the personal information area where  you enter whether you are retired/ employed / self-employed etc. are not the determinant in the categorization of the actual income ---  W-2 implies FICA taxes withheld/shared by employer, self-employment implies SECA taxes are due on net income.

Please tell more about your actual situation --- which country, when did you enter that country, are you employed locally or by the US govt. arm; where did you perform the work; is this your first year etc. 

pk

[kagemusha]

PK. Basically, I live in Canada. Have been self-employed since I moved here over 25 years ago. Became compliant in 98 by filling out the Form 2555, Sched C, TD9022. Up to now, I didn't get many T4 and was mainly self-employed. I always reported my worldwide income and any US income whenever I worked in the States. My Schedule C shows all of my self employed income and I was always under the impression (when I spoke to an IRS agent a long time ago) that I didn't need to file the SE form...   As a result, I have never filed an SE and have never received any letters or info from IRS stating that I needed to. 

Up to now, I have always just put down "self employed" under employer but recently thought that since I have a few other employers who pay me with cheques and give me a T4 (equivalent to a W2), I wasn't sure if I should still continue to leave it as "self-employed". My tax situation is quite unusual and bizarre and the IRS agent once told me that if he were me, he'd just hide in a cave! 

[pk]

@kagemusha  as I understand the  totalization agreement  between Canad and USA  ---https://www.ssa.gov/international/Agreement_Pamphlets/documents/Canada.pdf

 whether you are employed or self-employed   while working in Canada / Quebec, only the local tax authority  collects the equivalent  FICA / SECA taxes. You do not have to file a schedule -SE for US tax purposes.   The advice from the IRS agent ( long time ago is correct  ).

You report your world wide income , for US tax purposes, as you have been doing  in the past .   No SECA or FICA requirement from the USA.

Hope this helps

pk

[kagemusha]

Thanks for your quick responses! It was very helpful AND reassuring! So for the 2555 it doesn't really matter what I put on line 3 for employer as long as I report all of my worldwide income to the IRS. It would just be simplest for me to put down "self employed". 

All the best.