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Author: lindytoes Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121461  
Subject: basic question on foreign income Date: 7/1/2014 9:09 PM
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I'm trying to determine if my daughter needs to file a Georgia state income tax return. I'm at the Georgia revenue site, have entered a question on the search query and no information comes up.

We have searched all around. She checked an ex-pat website and Georgia doesn't appear to be one of those states that requires a US citizen who works overseas to file an income tax return. She lives overseas ~11 months out of the year. In fact, it appears that she is considered a non-resident. Does that make sense or seem correct?

Also, she has found out that she needs to file a 2555 form to report foreign income under $92,900 to the feds.

Is that all she has to do?
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Author: reallyalldone Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 121040 of 121461
Subject: Re: basic question on foreign income Date: 7/2/2014 8:30 AM
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In fact, it appears that she is considered a non-resident.

This is a non-tax response but for things like voting and higher education, she may want to check on what it takes to remain a resident.

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Author: irasmilo Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 121041 of 121461
Subject: Re: basic question on foreign income Date: 7/2/2014 8:59 AM
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I'm trying to determine if my daughter needs to file a Georgia state income tax return. I'm at the Georgia revenue site, have entered a question on the search query and no information comes up.

We have searched all around. She checked an ex-pat website and Georgia doesn't appear to be one of those states that requires a US citizen who works overseas to file an income tax return. She lives overseas ~11 months out of the year. In fact, it appears that she is considered a non-resident. Does that make sense or seem correct?


The GA Department of Revenue doesn't make finding the definition of residency easy. I had to go to the actual law code, O.C.G.A. 48-7-1 (emphasis added):

(10)(A) "Resident" means:

(i) Every individual who is a legal resident of this state on income tax day;

(ii) Every individual who, though not necessarily a legal resident of this state, nevertheless resides within this state on a more or less regular or permanent basis and not on the temporary or transitory basis of a visitor or sojourner and who so resides within this state on income tax day; and

(iii) Every individual who on income tax day has been residing within this state for 183 days or part-days or longer, in the aggregate, of the immediately preceding 365 day period.

(B) Every individual who, having become a resident of this state for income tax purposes under divisions (i) and (ii) of subparagraph (A) of this paragraph, is deemed to continue to be a resident of this state until the person shows to the satisfaction of the commissioner that he or she has become a legal resident or domiciliary of another state and that he or she does not come within division (iii) of subparagraph (A) of this paragraph. Upon such a showing with respect to any 12 month period immediately preceding income tax day, the person shall be taxable as a resident of this state only to the date of becoming a nonresident on an apportionment basis as prescribed in Code Section 48-7-85.


Based on the bolded section, I believe she continues to be a GA resident and must file a GA income tax return. I am not a GA resdident, nor am I fluent in GA tax regulation, so if the accuracy of my answer is important to you, I would advise seeking competent professional counsel.

Also, she has found out that she needs to file a 2555 form to report foreign income under $92,900 to the feds.

Is that all she has to do?


No. Form 2555 is used to exclude her qualifying foreign earned income from federal taxation. It is an attachment to her regular Form 1040. The rules allowing for the foreign earned income exclusion are complex, so she needs to read the Form instructions carefully before asuming that she qualifies.

Ira

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Author: vkg Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 121042 of 121461
Subject: Re: basic question on foreign income Date: 7/2/2014 12:46 PM
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Does her employer provide tax filing assistance? Many companies with ex-pats do provide the service.

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Author: lindytoes Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 121055 of 121461
Subject: Re: basic question on foreign income Date: 7/5/2014 8:26 AM
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Thanks for all the help. No, her employer doesn't provide help. She's a teacher at a private school. She just left Vietnam (btw she paid 20% in income taxes) and is now home for a little over a month, then she is moving to Germany to teach.

She was born and raised in Georgia and uses my address for her permanent residence so I was pretty confused about the non-resident thing.

It looks like we have a lot of studying to do. Again, thanks for the information.

re: voting. I don't think she has voted since she went overseas (but I could be wrong). In any case, she voted here about 3 years ago and that may have been enough for the feds. She got a jury summons for federal court for August 4. She leaves the US August 10, so I guess she will be dismissed.

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Author: irasmilo Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 121056 of 121461
Subject: Re: basic question on foreign income Date: 7/5/2014 10:57 AM
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Thanks for all the help. No, her employer doesn't provide help. She's a teacher at a private school. She just left Vietnam (btw she paid 20% in income taxes) and is now home for a little over a month, then she is moving to Germany to teach.

She was born and raised in Georgia and uses my address for her permanent residence so I was pretty confused about the non-resident thing.


Based solely on the information above, your daughter might not qualify for the foreign income exclusion as she might not have met either the bona-fide residence or physical presence tests at the federal level. It's even less certain that she has relinquished her GA residency. I would strongly advise consulting a local tax professional to resolve her tax residency status.

re: voting. I don't think she has voted since she went overseas (but I could be wrong). In any case, she voted here about 3 years ago and that may have been enough for the feds. She got a jury summons for federal court for August 4. She leaves the US August 10, so I guess she will be dismissed.</i.

Voting is only an indicator of residency. There is a presumption that you are a resident where you vote. Failure to vote (or to register to vote) does not suggest that you are a non-resident.

Ira


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Author: reallyalldone Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 121057 of 121461
Subject: Re: basic question on foreign income Date: 7/5/2014 4:19 PM
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Sorry for mentioning voting. I consider it a privilege.

Residency for other issues like higher education also appears unimportant. So again, I apologize for mentioning it.

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Author: YewGuise Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 121058 of 121461
Subject: Re: basic question on foreign income Date: 7/5/2014 4:27 PM
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Ah, memories. Ira was also helpful when I was in a similar situation 5 years ago:
http://boards.fool.com/working-abroad-27826465.aspx?sort=who...

FWIW

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