# US citizen living and working in China with fequent business travel back to US



## kitt314159 (Feb 26, 2015)

I am an US Citizen who have been living and working in Beijing since Feb 2013. I get paid in CNY and I pay full taxes to China as a local employee. I have a yearly work visa to China and can stay indefinitely in China throughout the year.

However, my work requires me to frequently travel to the US for business meetings. I spend about 50% of my time in the US. When I am in the US, I also have a shared custody arrangement with my ex-wife for our 3-year old son, where I have him for about 40% of the time when I am in the US (total time about 20% for the whole year)

Does anyone know if my situation will ever allow me to exclude my US income when filing US taxes? I am afraid that the tax home, bona fide resident test, and the physical presence tests are all quiet confusing... Would appreciate it if anyone an help point me in the right direction.


----------



## Bevdeforges (Nov 16, 2007)

Well, I fully agree with you that the physical presence test and the bona fide resident test are about as clear as mud in situations like yours.

It looks like you'd be really hard pressed to qualify under the physical presence test because that's the one where you have to be outside the US for 330 days in a period of 12 consecutive months. Being back in the US for 35 or more days a year pretty much puts you out of the running.

Now, the bona fide resident test might work, despite the time you spend each year in the US. For that you have to be able to show that you are maintaining your primary residence (and tax residence) in China throughout an entire calendar year. This is the IRS page on the subject: Foreign Earned Income Exclusion - Bona Fide Residence Test

And you will note that they say that they can't make a determination until you have filed a 2555 with your tax return. That kind of implies that maybe you should just file that way and see what they come back with.
Cheers,
Bev


----------



## BBCWatcher (Dec 28, 2012)

That's at least a bit tenuous, though, when you've got joint custody of a child who lives in the U.S. Check the bona fide residence rules carefully.

You can certainly still take the Foreign Tax Credit. Looking at China's income tax rates, the FTC will cover you pretty well anyway and still keep open things like IRA contributions and tax credits.


----------

