# I tried to do my taxes online.Got mangled.



## Sparky McGhee (Nov 12, 2014)

I am a nomadic teacher. I taught in two countries last year and made a grand total of $22K in 2015. I tried to fill out my taxes in one of the free online links that the IRS website provides. It says I owe $1600. I can't figure out why. I think the reason might be because I have one U.S. W-2 for $151 from a university in the U.S. The other two jobs I had have no W-2's. I just estimated my income from the statements I got from my foreign uni's. 

So with $151 in U.S. income, and $22K in foreign income, I don't think I should owe anything. How do I make the $1600 go away? Is there a good online tax form for expats?


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## Bevdeforges (Nov 16, 2007)

The big issues is whether or not you qualify for the FEIE (Foreign Earned Income Exclusion) so that you can exclude the foreign earnings on form 2555. Otherwise, unless you paid foreign income tax on your foreign earnings, you may be stuck with the tax bill.
Cheers,
Bev


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## Sparky McGhee (Nov 12, 2014)

Thanks, Bev. I appreciate it. 

I think I am a 2555 kinda guy. I have been teaching for 11 years abroad and I never owed anything. Last year, 2015, I worked in China for 6 months and paid Chinese taxes on my salary. I also worked for 4 months in Oman where I earned a tax free salary (no expat taxes in Oman). 

I didn't notice form 2555 in anything I filled out online. Do I have the option of filling it out in any of the online filing services? I'm not too bright, so if you could walk me through what I have to do to fill out the right form I would appreciate it.

I was strongly under the impression that I don't owe anything on foreign income under $95K.....


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## Bevdeforges (Nov 16, 2007)

In order to take advantage of that "don't owe anything on foreign income under $95K" you need to file a form 2555. The option should be available on some of the free tax filing sites, though many of them won't let you file for free if you don't have a state return to file (for a fee) or if you have an overseas address.

Worst case, download the "free file fillable" forms from the IRS and use what you got from whatever site to fill in the proper lines, then add the form 2555 (2555-EZ if you qualify - the requirements are on the top of the form). When you work your way down the form, the last couple of lines say where to put the resulting numbers on the 1040 form.

If the site you used claims to be able to do form 2555, make sure you have entered your foreign wages as foreign - there's usually a separate form for those (i.e. don't swami up a "dummy" W-2 - look for something called Foreign Employer Compensation or FEC).
Cheers,
Bev


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## Sparky McGhee (Nov 12, 2014)

Thank you very much Bev. I managed to file my federal return by retracing my steps and replacing the w-2's with the 2555. I sincerely appreciate it.

I have one other question. I received one bona fide w-2 from an employer in the state of New York for $151.52. I was never in the country during 2015. I reported it as a separate W2 and then reported the rest of my income on 2555. 

The free efile service I used wanted to file a state return and I needed to override it. Should I file a state return in New York even though I never resided there?

The fact is, I have no residency in any state in the USA, and if I ever move back, it would likely be New York. I am wondering if it makes sense to file in New York, even if I don't have to, in order to establish residency. If you can tell me what you think I would appreciate it.




Bevdeforges said:


> In order to take advantage of that "don't owe anything on foreign income under $95K" you need to file a form 2555. The option should be available on some of the free tax filing sites, though many of them won't let you file for free if you don't have a state return to file (for a fee) or if you have an overseas address.
> 
> Worst case, download the "free file fillable" forms from the IRS and use what you got from whatever site to fill in the proper lines, then add the form 2555 (2555-EZ if you qualify - the requirements are on the top of the form). When you work your way down the form, the last couple of lines say where to put the resulting numbers on the 1040 form.
> 
> ...


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## Bevdeforges (Nov 16, 2007)

The only reason to file in New York might be to claim back any NY State taxes that were withheld from your check. Though some states simply won't refund withholdings if you're living overseas and claiming them for that reason. (In fact, you could still claim "exclusion" of the W-2 amount if you did the actual work outside the US - but for so small an amount, it seems kind of pointless.)

Filing taxes in NY won't do you any particular good when and if you eventually relocate back to there. And it could complicate matters if the tax people decide you are still resident there for some reason.
Cheers,
Bev


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## Sparky McGhee (Nov 12, 2014)

Thanks, Bev. One thing I lose sleep over is healthcare. I don't understand Obamacare. If I get sick when I am living abroad I am going to have to go home: my contract has a clause that says if I can't work for thirty days the contract can be cancelled. I picture myself landing in some random airport needing healthcare and everybody telling me I can't have it because I am not a resident. My last state of residence was California and claiming residency there is problematic because I hear that they collect foreign taxes and I would owe them eleven years worth. Anyway, I don't want to go back to California. 

Can you tell me what I should do now, if anything, to establish whatever residency I may need in the future to get this here Obamacare or whatever it is I will need?


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## Bevdeforges (Nov 16, 2007)

Obamacare came in well after I left the US, so I'm a bit fuzzy on the workings of it. However, you don't "need residence" to sign up for a healthcare plan. If and when you go back to the US, you establish residence by, well, living there - and you probably should look into finding a plan (they're all private plans in the US - until you hit age 65 and qualify for Medicare) as soon as you decide to return for any reason.

At this point, it might not be a bad idea to find an international "expat health insurance" - pricey, but it would at least provide cover in the event of need. That would allow you to get care and treatment wherever you are, and perhaps give you a bit of a cushion (at least a couple of months) should you have to return to the US for health reasons.
Cheers,
Bev


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## rsetzer99 (Feb 20, 2014)

Affordable Care Act, aka Obamacare, is just a mandate that everyone in the US must have health care insurance, or pay a tax penalty. If you qualify for Foreign Income Exclusion, then you will qualify for exemption from the ACA. You will need to slap another form on your return (8965) to document your exemption. 

The Affordable Care Act uses the same presence test used for Foreign Income Exclusion. If you did return to the US, you could buy insurance through one of the health care exchanges. Application is typically online. The law stipulates the companies cannot exclude pre-existing conditions. It does not matter which State you take up residence in, seeking to pre-establish residency is probably not even possible, and regardless, would offer no advantages.


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