Earn US dollars live out of the country

[NYSEM]

I provide consulting services remotely, through a US agency based in the US to people who live in the US and I am paid in US dollars.  I live in another country.

How do I reflect that on my tax forms?

[DaveF1006]

It depends. Are you a US Citizen or resident alien? If not, you would file as a non resident.  To file as a non-resident, you would need to contact Sprint Tax, which our affiliate that will file your 1040 NR return and answer your questions on how to file. Here is their link.

[NYSEM]

I am a US Citizen

[RobertB4444 · Accepted solution]

Then you file your return just as you would if you lived here.  Provide your foreign address and any foreign taxes you paid.

You will need TurboTax Deluxe or better.

[NYSEM]

Thank  you

[ThomasM125 · Accepted solution]

If you pay any income taxes in the country you live in, you may be entitled to a foreign tax credit. You can complete that section in TurboTax, it is in the Deductions and Credits area, under Estimates and Other Taxes Paid, and then Foreign Taxes.

[NYSEM]

Where do I enter foreign taxes paid on the federal tax return?  Thank you

[RobertB4444]

Deductions and Credits > Other Taxes Paid > Foreign Taxes

[NYSEM]

The section in Turbo Tax is talking about earning foreign currency or earning foreign income.  I earned US dollars.  I have paid Francs to the Swiss Government where I now live for 2021 taxes.

Can I still apply for the credit if I am earning US dollars?

[RobertB4444]

Sure.  You would have to convert it to US dollars in order to do the return no matter what they were paying you.

[NYSEM]

I paid them, I paid taxes in a foreign country

.  They did not pay me. I earn US dollars at a US company

[NYSEM]

Must I report taxes paid to a foreign country?

[MarilynG1 · Accepted solution]

No, you don't have to report your Foreign Taxes paid, but you can get a Tax Credit if you do so and avoid paying taxes on your income to both the US and the foreign country you reside in. 

Click this link for more info on the Foreign Tax Credit.