# How to figure tax credits



## boat (May 17, 2014)

Hello all- Thanks for the help in the previous years. I guess its getting to be tax time of year again. I hope somone will have a quick answer for me. 

The last four years I filed in the US and New Zealand paying tax to NZ and building tax credits in the US. This year I had four months in the US and no time in NZ so I am planning on filing and paying in the US. My last accountant told me I have tax credits built up from paying more in NZ than the US would have charged. 

How can I find out how much in tax credits I have accrued. I asked the accountant that filed my taxes the last four years but she seems to have dropped out from work this season. 

Is there a line for tax credits on my last tax filings? Can I just look it up?

Thanks for the help and ideas.


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## boat (May 17, 2014)

Wait ... found it in an old email. 14,383. She also mentioned that my tax in the US would be dependent on the amount of time I spent in the US? How does that work if I am only filing in the US this year?

Thanks

Scott


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## Bevdeforges (Nov 16, 2007)

You say you're only filing in the US this year. But with only 4 months there, where are you considered to be tax resident?
Cheers,
Bev


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## boat (May 17, 2014)

Bevdeforges said:


> You say you're only filing in the US this year. But with only 4 months there, where are you considered to be tax resident?
> Cheers,
> Bev


That is the tricky part. We spent 4 months in the US for work, and no place else. The other 8 months we were in multiple countries for work but not as a tax resident. Thus we don't pass the physical presence test, or that we are paying tax anywhere else. For that I think we will be a US tax resident with 4 months inside the country. 

In 2016 we should pass the physical presence test and receive the 100k deduction. For now I have to do the 2015.


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## Bevdeforges (Nov 16, 2007)

If you met the physical presence test up until the time you went to the US to work, then you can exclude any earnings you had before you got to the US. And if you've been outside the US since those 4 months there, you will re-qualify 12 months after your departure (again, just for earnings outside the US).

It's only the US earnings that you're liable for taxes on. Unless you were awfully well paid during those 4 months, your available tax credits ought to cover any tax liability incurred while working in the US.

If you have earned income to exclude from your time after you left the US, you should extend your tax deadline until the one-year anniversary of your departure from the States so that you'll be able to just exclude the income again. (On "earned income" you don't need to have paid taxes on it to include it under the FEIE.)
Cheers,
Bev


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## boat (May 17, 2014)

Wow, that seems like a super friendly regulation. 

So in practice, looking at the logs, I paid tax in NZ for 2014. I arrived US 25 July 14, leaving the US on 6 Dec 2014 with October also out of the US. In 2015 I had May 22 through 12 Nov. In 2016 we had one week in March inside the US and plan on not returning for the foreseeable future. 

Is there any way that set of dates might fit into this 

Thanks again for all the thinking.

Scott


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## Bevdeforges (Nov 16, 2007)

You may be misunderstanding here, but you owe US tax for the earned income you have while in the US. However, if you've got excess tax credits for earned income from your time in New Zealand, you could conceivably use those credits to offset the US taxes you owe.

Now, to restart the clock on the physical presence test, you have to have been outside the US for 12 consecutive months - so the month of October 2014 doesn't get you anything toward physical presence.

For 2015, your physical presence clock starts over again on 13 Nov. for being outside the US, as long as you don't file your 2015 return until mid November 2016. (You'll need to apply for the appropriate extensions.)

Take a look at IRS Publication 54 for the details on how this works.
Cheers,
Bev


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