Expatriate income tax

[Greg Charles]

I've been living and working overseas since June 11, 2003. I'm having a professional tax preparer do my returns because the expatriate forms are so complicated. (He's still working on the 2003 return, but it's almost done!) He claims that my overseas income is exempt from federal taxes, but I still have to pay California taxes. Is that right? It seems backwards. I'm still a U.S. citizen, so it would be somewhat reasonable for the Feds to want some of my money, but I'm no longer a California resident. What claim do they have? Are they going to be able to tax my 2004 income as well?

[Colibri]

Regarding federal taxes: Yes, the first $80,000 or so (I haven't looked up what it is this year) of your Federal taxable income is exempt from income tax, as long as you are a bona fide foreign resident, and unless you are employed by the Federal government.

I don't know about what the deal is with California. I don't pay state or local taxes either; my last place of residence was DC but I haven't lived there for 12 years.

[iwakura43]

As an expatriate, you do have to pay income tax to the state where you claim domicile. In a thread I read here somewhere today, it was mentioned that many soldiers in Iraq declare Florida as their domicile, solely because of the tax benefit.

[ShibbOleth]

When I moved overseas, I was advised to cut all ties with the state of Ohio, so that I wouldn't have to pay state taxes (or minimize them, accountants also handled most of this stuff for me). So I moved my financial assets to another bank that was not Ohio based. I don't recall that I really did much else.

It is very easy to establish domicile in Florida, although probably a bit late for this year. I think you can just go to a courthouse, or even just write to a courthouse and say you want to be a resident. I'm sure that they give you special preference if you promise to always vote Bush.

[Duckster]

Originally Posted by iwakura43

As an expatriate, you do have to pay income tax to the state where you claim domicile.

Cite?

I ask this because when I lived overseas I only filed federal income tax. I never filed a state income tax form.

[Martin Hyde]

Originally Posted by ShibbOleth

When I moved overseas, I was advised to cut all ties with the state of Ohio, so that I wouldn't have to pay state taxes (or minimize them, accountants also handled most of this stuff for me). So I moved my financial assets to another bank that was not Ohio based. I don't recall that I really did much else.

It is very easy to establish domicile in Florida, although probably a bit late for this year. I think you can just go to a courthouse, or even just write to a courthouse and say you want to be a resident. I'm sure that they give you special preference if you promise to always vote Bush.

Yes because Florida, and everyone who lives there is Republican just like the rest of the South and they are also all corrupt.

[Martin Hyde]

Originally Posted by Duckster

Cite?

I ask this because when I lived overseas I only filed federal income tax. I never filed a state income tax form.

Not sure where to find a cite but it's the truth as I've lived overseas before and have had to pay State taxes.

[C3]

I have a related question that you all may be able to help out with (I'll ask an actual tax attorney at some point, too).

My husband and I moved to Australia 6 months ago. He is an Australian citizen and does not hold U.S. citizenship. I am an American citizen and do not hold Australian citizenship. He works; I am a stay-at-home mom.

When we go to file taxes in the U.S., I presume the only income we'll have to claim for him is what he made in the U.S.? Since I don't have an income, everything he's made from the point we got to AUS is not eligible for tax in the U.S.? How does that work?

[ruadh]

Originally Posted by Greg Charles

I've been living and working overseas since June 11, 2003. I'm having a professional tax preparer do my returns because the expatriate forms are so complicated. (He's still working on the 2003 return, but it's almost done!) He claims that my overseas income is exempt from federal taxes, but I still have to pay California taxes. Is that right? It seems backwards. I'm still a U.S. citizen, so it would be somewhat reasonable for the Feds to want some of my money, but I'm no longer a California resident. What claim do they have? Are they going to be able to tax my 2004 income as well?

I moved to Ireland from California four and a half years ago. I simply stated that I was no longer a California resident, and I haven't had to pay any taxes to California since.

Note this means I had to give up the right to vote in California elections, although federal law still entitles me to vote as a California resident in federal elections.

[China Guy]

Originally Posted by C3

I have a related question that you all may be able to help out with (I'll ask an actual tax attorney at some point, too).

My husband and I moved to Australia 6 months ago. He is an Australian citizen and does not hold U.S. citizenship. I am an American citizen and do not hold Australian citizenship. He works; I am a stay-at-home mom.

When we go to file taxes in the U.S., I presume the only income we'll have to claim for him is what he made in the U.S.? Since I don't have an income, everything he's made from the point we got to AUS is not eligible for tax in the U.S.? How does that work?

If hubby has a green card, then he is liable for US taxes.

I have lived abroad for about 20 years and never paid state taxes. I've done my own filing for most of the 20 years and it's pretty easy actually unless you have a lot of investments and strange income.

One of the big firms does my taxes now, and they didn't even ask what state.