# Traveling Abroad Extended Period, Residence and Employment in the USA, tax confusion.



## JeffreyO (Nov 12, 2015)

Hello,

I have a question about taxes and I was hoping you could help me.

Late last year I had gone to Thailand for 3 months. During that time I maintained my US address in New York and for 2014 I filed my taxes as a resident of New York. I work for the same company as I work online and was only going to come here for a brief period. Due to unforseen circumstances a brief time became extended, this year I have been to Japan, Hong Kong, Vietnam, Laos, Burma, Malaysia, Cambodia, Thailand, Philippines, etc.

From my companies perspective my address is still New York. That means their W2 tax form will say New York. I'm curious, is there any reason I shouldn't continue to file as a resident of New York? I heard something about living outside the country for more than six months and you're no longer considered a resident but from a lease perspective and my companies perspective and a tax sense, everything says I have/am a resident. 

Any advice would be helpful. Thanks!


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## BBCWatcher (Dec 28, 2012)

JeffreyO said:


> I'm curious, is there any reason I shouldn't continue to file as a resident of New York?


New York is unlikely to have an objection to your filing as a New York resident. Whether you have the option to file as a non-resident depends on New York's definition of tax residency.

The same is true for the various countries you rattled off. They each have their own definitions of tax residency. Yes, you could be a tourist (and even perhaps violate the conditions of your immigration status) and be subject to local taxation. They're two separate sets of laws, and it's possible to violate neither set, either set, or both sets.

If you are a tax resident of New York then you pay tax to New York based on your worldwide income with certain credits, deductions, and/or exemptions allowed. If you are not a tax resident of New York then you still pay tax to New York based on your New York source income with fewer deductions, credits, and/or exemptions allowed. New York has a separate definition of New York source income, but I can tell you that any amount of time qualifies -- theoretically you can step foot in New York for one minute and owe tax to New York -- but there is a minimum income threshold. If you're a highly compensated individual then even one day (or part of a day) working in New York can trigger a New York tax liability.

Likewise, the countries that you listed each have their own definitions of national source income.

Work is where you perform it -- where you are physically located when you are working. It is not how long the wire (or wireless connection) is between you and whatever you're manipulating electronically. If you are working on Wall Street trading stocks and bonds on the Hong Kong Exchange, you are most definitely working on Wall Street and owe New York tax. Programmers, Web developers, call center staff, telegraph operators, NASA engineers monitoring the space station and deep space probes -- it doesn't matter. Their tax home is not based on the location of the deep space probe. I suppose it's theoretically possible for a tax jurisdiction to have a "wire" exception to my general statement -- practically anything is possible -- but I've never found such an exception.

Within the State of New York there are certain municipalities that have their own income tax domains such as New York City and Yonkers.


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## Bevdeforges (Nov 16, 2007)

If you want to maintain your US address and state tax obligation that's not a problem (and under certain circumstances may even be a good idea). 

However, for US federal tax purposes, you may be able to claim the FEIE (Foreign Earned Income Exclusion) if you spend 12 consecutive months outside the US, regardless of whether you shifted your "residency" outside the US. Despite what you hear from other countries, the 6 month (or 183 days) standard isn't used in US taxes, at least not for US citizens and permanent residents - certainly not in the same way anyhow for determining "residency."
Cheers,
Bev


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## JeffreyO (Nov 12, 2015)

Interesting, this is all very good information. I was concerned that if I filed as a New York Resident but haven't returned to the USA within that period of time I would run into issues if audited.

I've never been audited but you never know. Of course I'd love to save on taxes but not drawing extra criticism that may lead to issues in the future would be ideal.


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## Bevdeforges (Nov 16, 2007)

Actually with a state like New York, the problem is usually disengaging yourself as a resident when you intend to do so. But, as a US citizen, there is no obligation to return to the States ever. And you can certainly retain your state residence for the purpose of paying taxes. 

A number of states also don't recognize the FEIE, so you wind up paying state taxes if you retain your state residence, even if you take the exclusion at the Federal level.
Cheers,
Bev


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