2018: More Relief from U.S. Worldwide Taxation
An exclusion for paying income taxes on foreign earned income
U.S. citizens and resident aliens (“green card” holders) must pay taxes on worldwide income. This means that, even if they do not live and only earn income outside the U.S., they must (1) file an annual tax return AND (2) pay taxes on any income they earn (regardless of where they earned it). But there is some relief. Congress allows U.S. citizens and resident aliens
Further details about this exclusion
In particular, to qualify for the exclusion, you must be out of the U.S. for 330 days during each 12 month period throughout the tax year or qualify for a bona fide foreign resident test for the full calendar year. The 330-day test is simple math… be out of the U.S. and you qualify. It doesn’t matter where you are in the world so long as you’re not in the U.S.
Bona fide residency in a foreign country
The bona fide residency test is more complex and based on your intentions. You must move to a foreign country for the “foreseeable future.” This new country should be your home and your home base. When you travel, it’s where you return to. It’s where you lay down roots. It’s where you file taxes and where you’re a legal resident (with a residency permit). In most cases, you will use the
YOU MIGHT ALSO LIKE
Cover photo: Flickr
Now that you're here:
We're asking you, our reader, to make a contribution in support of our digital guide in order to keep informing, updating and inspiring people to visit Peru. Why now? In our near 20-year journey as the leading English-language source on travel in Peru, we've had our fair share of ups and downs-but nothing quite like the challenges brought forth in the first quarter of 2020.
By adapting to the changing face of the tourism and travel industry (on both local and international levels), we have no doubt we will come out stronger-especially with the support of our community. Because you will travel again, and we will be ready to show you the best of Peru.
Your financial support means we can keep sharing the best of Peru through high-quality stories, videos and insights provided by our dedicated team of contributors and editors based in Peru. And of course, We are here to answer your questions and help whenever you need us.
As well, it makes possible our commitment to support local and small businesses that make your visit an unforgettable one. Your support will help the people working in these industries get back on their feet once the world allows us to make our dream of enjoying everything Peru has to offer a reality again-from its mouthwatering gastronomy, thriving Amazon and archaeological wonders such as Machu Picchu.
Together, we will find a way through this. As a member of our community, your contribution, however big or small, is valuable.