Do we get a tax break after living for an extended time in a foreign country? How? 4 Answers as of July 20, 2015

We just moved to Thailand as full time missionaries and basically when you are in another country for 24 months you don't have to pay state taxes. We want to know if there is a break like that or if there is an amount of time before you get that break.

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Ronald K. Nims LLC | Ronald K. Nims
It's easy to confuse state citizenship with USA citizenship. A USA citizen remains a USA citizen regardless of where they live. You cease to be a state citizen when you move out of the state. If you move out of state in July, you'll have to file a part year income tax return on the income you earned while living there but you're not liable for taxes on the income you earned after you left (except California, which has a penalty on part year residents using a complex calculation). As a USA citizen living and working in a foreign country, you MUST file Form 8938 reporting foreign bank accounts. If you don't the penalties are EXTREME. With their typical bungling, Congress enacted a law to catch drug dealers, Hillary and other felons who hide their wealth in foreign countries but forgot that many law abiding USA citizens live and work abroad, maintaining normal, legal pension funds and bank accounts.
Answer Applies to: Ohio
Replied: 7/20/2015
Polsinelli Shughart PC | William B. Prugh
I don't know about state taxes, you may be talking about not being a resident or domiciliary of a state after a period of time. Do you have access to the web site so you can read the IRS publications on US citizens living abroad. You may be right about getting a tax break, and you may be helped bu the US - Thailand tax treaty as well. Some more research is required.
Answer Applies to: Missouri
Replied: 7/15/2015
Andrew Gordon
Andrew Gordon | Andrew Gordon
Yes, you may be subject to an exclusion of your earned income. It is important to know that you still have to file taxes while living abroad, you may just not have to pay. I would suggest contacting a tax attorney or CPA to discuss your specific case and whether the earned income exclusion applies and to what extent.
Answer Applies to: Illinois
Replied: 7/15/2015
Irsfeld, Irsfeld & Younger LLP | Norman H. Green
You can earn up to about $75,000 per year abroad while living abroad and exclude it form U.S. income, provided that you file your return and report it on the appropriate form. U.S. source income or unearned income is fully taxable.
Answer Applies to: California
Replied: 7/15/2015
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