Questions about tax free and Irs tax form
Q.I'm a Canadian just been offered a job as a webmaster, the company is in the UK but I can work from here - my question is, Can I get money on the IRS tax form for the US ? How much tax free can I get ? and how does this affect my taxes? Thank for any replies
A.Actually, I think there are tax treaties which prevent you from paying taxes twice. (at least up to a certain amount) Check out the IRS website, or call your local tax man on this. You might also find some help in this explanatory file: http://www.irs.gov/pub/irs-trty/uktech.pdf Well if you take the job you had best get unconfused quickly. The US and the UK have a tax treaty in effect. You pay taxes either there or here. Whichever is the less expensive I assume. If you pay it there, you still claim the money on the IRS tax form for the US but you are allowed around $76,000 tax free of foreign income as long as you have paid taxes on it in that other country. So you put it on the IRS 1040 and then take it off later on. Your best bet is to contact a good tax accountant and/or the IRS itself and confirm the best approach for your income situation. Actually, the foreign earned income exclusion (with the $76K exemption) could not be applied in this case. The exclusion requires either bona fide residence or physical presence in the other country, which this person won't have, since he's working from the US. You should be able to claim foreign tax credits, though, although he may still end up paying a small amount of tax in the US
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