Am I exempt from US taxes on income earned in a foreign country?
1. You must declared your foreign income. 2. If you only have wages, then you will either fill Form 2555 or Form 1116. Check if you meet the residency requirements to fill Form 2555. If you don’t, then fill Form 1116. 3. If you have wages and other foreign income (interest, dividend and capital gains), then you can fill Form 2555 for wages and Form 1116 for interest etc. Or Form 1116 for all types of income. 4. To calculate the income and taxes paid in the U.S. dollars use the rate at which money can be sent to the U.S. Also, if you received payments by 10 checks, then you use currency rates for 10 different dates. Similarly for taxes withheld. This is not difficult as many Currency Converter web sites provide this information. 5. It will be too difficult to complete your return yourself without using any software. You may need to complete Form 2210– Underpayment of Estimated Tax and other forms for Alternative Minimum Tax. 6. For your wages or salary income, you need not worry about
