If this is your first year living overseas, you probably have a number of questions about how to deal with the whole “overseas tax thing.” The Overseas Tax Q&A and Foreign Earned Income Exclusion pages will give you a more thorough explanation of some of the issues you need to know, but following is a quick synopsis of the key issues for first-time overseas filers.

1. You do need to file a tax return. You may have heard that your salary is all or partly “tax free.” If you meet certain requirements, it is true that you may not owe any US income tax on your foreign earned income. However, you are still required to file a US tax return every year, even if you owe no taxes.


2. For 2009, up to $91,400 of foreign earned income may be excluded from US income tax. (See Qualifying for the Foreign Earned Income Exclusion on the Overseas Tax Q&A page.) If you only lived overseas for part of the year, this amount is prorated to the proportion of the year in which you lived overseas.


3. When you live overseas, you are allowed an automatic two-month extension to file your tax return, until June 15th. You do not need to make a special request for this.


4. If you expect to qualify for the exclusion, your first year abroad you will often need to request a lengthier extension until you have passed either the Bona Fide Residence Test (living overseas a full calendar year and meeting some other requirements) or the Physical Presence Test (being overseas 330 days in a 12-month period). See the Overseas Tax Q&A page for more complete details. The extension request should be filed as early as possible, and definitely before June 15.

Read the Overseas Tax Q&A and Foreign Earned Income Exclusion pages to get more of your questions answered. If you have additional questions, feel free to email us during the off season.