# US expat FEIE questions



## bfoxg8r (Jul 26, 2021)

Good day

I'm a US citizen, now living and working in the Turks and Caicos. I would like to take advantage of the FEIE, but have a few questions. This is all very new to me so I thank you for your patience.

We moved here June 1, 2021 and plan on staying until June 2022. We will meet the 330 day benchmark.This would qualify us for the physical presence test. Here are my questions:

1. Should I ask my employer to stop withholding taxes from my pay now? Use form 673?

2. Can I claim FEIE for June - end of year 2021? Or do I have to wait until I have completed the 365 days? If I file my 2021 taxes in April 2022, I will not have completed the 365.

3. If for any reason I move back to the US early, do I simply pay the taxes I owe?

Also there isn't a tax advisor here that deals with this. If you can recommend one, that would be great.

Thanks for any help. This was a last minute opportunity, and we were a little unprepared.


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## Moulard (Feb 3, 2017)

I will set aside for the moment the question of whether your tax home would actually be Turks and Caicos... but assuming that it is, and thus you meet that eligibility requirement...

1. Entirely up to you whether or not to do so. But yes, that is the form to claim exemption from federal income tax withholding. Social Security taxes would continue to be withheld. Given your stay is of a temporary nature, depending on the State you currently live in it is entirely possible that state income taxes would still apply as you might be still considered a tax resident of the state.

2. You only become eligible to file f2555 after you have been out of the country for 330 full days. The clock would start the day after you arrived, as time travelling over international waters would not count. Thus you would need to delay filing your 2021 tax return until you met that threshold... in June or July 2022. At which point you would be to exclude approximately half of the FEIE limit (somewhere a bit over 50k USD) because you will have been out of the US for approximately half of the year. You would need to File Form 4868 to file as late as October. Do note that you would want to pay any US taxes on time even if you had not submitted your tax return yet to avoid interest and related penalties. Foriegn tax credits would be of no help because Turks and Caicos has no personal income tax...

3. If you returned early there are a bunch of things you need to consider. 

First, there is no income tax treaty between Turks & Caicos Islands and the US. Ordinarily this would potentially result in double taxation as the US could tax your global income by virtue of your US citizenship and Turks and Caicos Islands could tax you on your global income if you were considered a tax resident ... but as there is no personal income tax there... it changes the risk profile of leaving part way through the year. 

The biggest risk would be a penalty for underpayment of estimated tax. If you returned early AND filed Form 673 no withholding would have occurred. You would want to inform your employer on your return to recommence withholding AND make an payment to the IRS for the amount that would have been withheld had you not filed form 673.


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## bfoxg8r (Jul 26, 2021)

Thank you for the information. Very helpful.


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