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inquisitiveman
Level 1

Live/work overseas - how to treat salary?

Hi,  My son lived in New Jersey until August 2021 and then took a job and is living in Abu Dhabi, UAE starting September 2021. He is a US citizen and will remain a US citizen, but will be living and working overseas for the next two years.

 

Question - how do I treat the salary that he has earned in Abu Dhabi from Sept - Dec 2021?

Is this taxable in the US because he is a US citizen? Or do I completely ignore this salary because he is living/working overseas?

 

Would amyone be able to walk me through the filings? 
I would very much appreciate it.

4 Replies
Carl
Level 15

Live/work overseas - how to treat salary?

A U.S. Citizen is required to report their world wide income on their tax return. They may qualify for a foreign earned income tax exclusion. But it still has to be reported on the 1040 tax return.

Foreign earned income is reported under the Personal Income tab in Less Common Income >> Foreign Earned Income and Exclusion.

Any foreign taxes paid on that income is reported under the Deductions & Credits tab in Estimates & Other Taxes Paid >> Foreign Taxes.

 

inquisitiveman
Level 1

Live/work overseas - how to treat salary?

Thank you Carl - appreciate it.

inquisitiveman
Level 1

Live/work overseas - how to treat salary?

Carl ( or anybody)

 

One follow-up question - how about State of New Jersey Income tax - how do I handle salary earned by NJ resident who is living and working overseas?

 

Thank upi

Carl
Level 15

Live/work overseas - how to treat salary?

You'll deal with that stuff when you get to the state return. I myself am a FL resident. Since I don't deal with state taxes, I know nothing about them. But basically, once you complete the federal return, necessary data will be transfered from the federal to the state return when you start the state return.

Be aware of one other thing too. If you do not have "ANY" W-2's, then you absolutely must start the W-2 section of the program and select the option for "I don't have any W-2's". If you don't do that, then the program will insist you enter W-2 information before you can complete/file the returns.

 

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