# 2555-ez Line 12c&d



## chammer (Aug 25, 2014)

I am a US citizen by birth. I'm confident that I am a bona fide foreign resident as I have been living in the UK for the past 5 years with my British husband, and do not maintain any "abode" in the US. 

However, I do travel home every year. Sometimes I will "work from home" while visiting relatives in the US (answer emails, make calls, etc). 

Does this time working from home still count as Foreign source income?

all advice much appreciated!


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## BBCWatcher (Dec 28, 2012)

The short answer: no. Whether work is "foreign" or the opposite of foreign ("domestic") in federal and state tax codes depends on where the work is conducted, not how long or short the wire is between you and the computer(s) or humans receiving your work product.

Many people think this is a new phenomenon, but no. Long distance telephony and telegraphy have been around practically since the U.S. income tax was invented, so it's "always" been possible to work in support of someone (or a company) not physically located in the same place you are when you perform the work. But that has never mattered and still doesn't. The Internet is just the latest type of wire (or wireless connection).

New York State is particularly interesting as an example. If you worked in New York State -- in other words, if you were physically present in New York State when you worked from home -- then you probably owe New York State income tax. Sure, most people don't know that and (due to that lack of knowledge) don't file, but that's my accountant's understanding, and my accountant is pretty good.

We get this question here all the time, so search this forum for past discussions of this topic.


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## Bevdeforges (Nov 16, 2007)

As BBC has already said, no working while you are "visiting" in the US counts as "working in the US' and it's the reason they have that section in the 2555 form detailing any time spent in the US, split into "days worked" and other. (Or however the form is set up.)

If the work you're doing while in the US is really casual and sporadic, such that you can't really determine how much of your pay/salary applies to that time worked, you can probably get by with reporting your time spent in the US as strictly "vacation." This is particularly true if the amount of income you're determined to have "earned" while in the US is well below the level where you'd have to begin paying taxes on it. (Generally, if you fall well below the amount for your personal exemption and standard deduction, based on your filing status.)

If you're actually working while in the US - say for a half day or a day at a time - then it's best to come clean and report the income earned that way as your US earnings. 

Hard to say exactly without knowing more about the exact circumstances of your situation.
Cheers,
Bev


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## chammer (Aug 25, 2014)

Thanks for your quick responses. 

The amount "earned" from working on each visit has always equated to less than anything that would result in owing tax. (eg- a couple days = less than the standard single deduction).

Therefore it is just a case of being totally transparent vs. ??? being lazy, I guess! 


Thanks for your feedback. Very much appreciated!


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## DavidMcKeegan (Aug 27, 2012)

Well even though you are not likely to owe any tax on the money earned while in the US, it is still important to properly calculate and report it. This is because income earned while working in the US is not considered "foreign earned", and thus can not be excluded by the FEIE. As you will have to report that income elsewhere on your 1040, it is important to be straightforward and not risk any negative consequences in the future.

You could also consider using the Foreign Tax Credit as you are sure to be paying more in tax to the UK than you would to the US. If you use the FTC you could even have excess credit that can be carried forward to next year. Also, as you are likely paying UK tax on the income earned while physically in the US, your FTC should offset any US taxes that may arise.

I hope this helps and good luck!


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## Bevdeforges (Nov 16, 2007)

chammer said:


> Thanks for your quick responses.
> 
> The amount "earned" from working on each visit has always equated to less than anything that would result in owing tax. (eg- a couple days = less than the standard single deduction).
> 
> ...


One thing to consider is the basis of your pay while you're in the US. If you're actually on your vacation time and just responding to the odd e-mail or phone call, I wouldn't bother to report it as having "worked" while in the US. If you are doing specific work for your employer based on being in the US (say, meeting with someone in the US offices) and being paid for that time, then you're definitely working in the US. It can depend on how you're being compensated.
Cheers,
Bev


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## BBCWatcher (Dec 28, 2012)

It's not just the U.S., by the way. When you work (from) somewhere you're working -- it's really that simple. There are immigration/visa- and tax-related complications (or even illegalities) in many countries if/when you do that.

There are lots of accountants (and other professionals) employed just to navigate those issues.

Yes, agreed, if you get a phone call or two and it's truly incidental (key word) to your bona fide vacation, that's not something to worry about.


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## Begave (Aug 27, 2014)

I got what I need. Thanks.


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