If I don’t make over $10,000 being single or $20,000 being married, do I have to file a US Tax Return?
Sometimes, and here is one of the reasons that folks miss out often and just give their money away.
If you have had income taxes withheld from any transaction in 2013 you need to file. Why? Because you might have a refund coming, and you only have 3 years from the date the return was due to claim that refund. That’s right, Uncle Sam doesn’t allow you to use him as a savings account for your tax refunds. If you had a tax refund coming from 2010, the return with the refund claim should have been filed by April 15, 2011. If you have not filed it, your refund will become the property of the US Government as of April 15, 2014. I have seen it happen many times.
How about an extension?
Remember that if you will be filing for an extension… it is NOT an extension to PAY, only an extension to file your return and you must submit a payment that will cover approximately 100% of your estimated TAX DUE at the same time you file your extension to avoid penalties and interest.
As a taxpayer “living out of the country” you automatically have a 2 month extension to file. You don’t need a special form. You only need to write “Out of the country on April 15, 2014” at the top of your return. But remember, you will still need to estimate your tax due and have it paid by April 15th in order to avoid penalties and interest.
Is some of my income earned in a foreign country exempt from US income tax?
Yes, although you are taxed on your World-Wide Income, you may be able to exclude up to $97,600 for 2013. In addition, you may be able to exclude or deduct certain foreign housing amounts.
It has been my experience living in this part of Mexico that most people qualify for exemption by living in the foreign country for 330 consecutive days during any period of 12 consecutive months.
This means if you move here after August 15th of 2013 and start working, you will need to file an extension to qualify for the 330 consecutive days. During the Automatic-6 month Extension, you will fulfill this qualification. You would only get a portion of the exclusion for the 1st year because of your actual days of residency in 2013 but, excluding some is better than none!