Filing Income Tax
My husband and I will be in the Santo Domingo pretty soon. We are federal retirees, and need some information on filing income tax. Can anyone share their experiences? As far as paying taxes, as we all know, uncle sam takes his portion first. When filing, will we be entitle to certain deductions? Are there any foreign taxes that we must pay? What about US state taxes, are we required to pay to our home state?
I'll really confused about this issue Any ligth that you can shed will be very helpful to us.
Thanks in advance.
we just got turbo tax and were able to do all electronically. if you have formal residency here (not just a tourist or business visa) or you can prove you have not been in the US more than 35 of the last 365 days you will get all of your taxes back (if you make less than $80,000 a year). you do still have to pay state taxes (property and income) but these will be based on foreign residency too. the tax program goes through it all.
Thanks so much for this information. When you file your taxes, you file as non-resident, use your address in the DR or a state side address?
on the tax forms you are asked your current foreign address. we maintain an address (po box) in the states simply because the mail system here is not reliable and have that on file with the government as our u.s. address.
Thanks so much. I feel better now. This formum has been more helpful to me than any government agency.
Sorry to burst your bubble, but the Foreign Earned Income Exclusion DOES NOT apply to Social Security or Pension income or government retirement payments to their retirees. It applies to EARNED income from WORKING. This exclusion also does not apply to investment income, such as CD interest, or annuity income.
If you do retire to the DR, but still earn additional money here, and are either a resident of the DR, OR are in the USA or its territories (such as Puerto Rico)for less than 35 days a year, you may apply the Foreign Earned Income Exclusion to your EARNED income. It will not apply to your investment or retirement income.
Also, it depends on the state you are a resident of, whether the state taxes do apply or not.
The best answer is a good CPA or a Tax Attorney who truly understands foreign income, and not some software in a box that sells for $39.95. You may end up paying far more in penalties and interest than an hour or two invested in counsel with a knowledgeable CPA or tax attorney. Even my old H & R Block lady with 35 years experience scratched her head and told me to do exactly THAT.
The 1040 you would file would look just like the same one you file now, most likely. There are no DR taxes apllied to foreign retiurement benefits paid to you if you live in the DR.