by Jen Ruhl
It's about time to be confused by piles of paperwork and math you haven't done since that stupid GenEd 4+ years ago! Here is a general outline of what you need to do for US taxes. Disclaimer: I'm not a tax expert, just an accountant's daughter. Get your forms at www.irs.gov (instructions, too!) or by calling the Tokyo Embassy IRS service at 03-3224-5466, or faxing 03-3224-5274. You can give me a call if this article confuses you, but I'm not responsible if you're hauled off to jail for tax fraud!
Your first step should be to fill out and send Form 8822 if your address is different from the one on last year's return.
Then, make sure you qualify for the Foreign Earned Income Exclusion (click here for an explanation). Basically, you could be exempt from paying tax on income you earned in Japan (or another non-US country) up to $80,000.
Everyone who is living overseas has an automatic 2-month extension (until June 14th) to file your return. FIRST YEAR people - you will have to file for an extension in order to qualify for Foreign Earned Income Exclusion! This is because of the Physical Presence Test requirement - you must be outside the United States for 330 days (explanation here). To get an extension to that 330th day (probably June/July), you will need to file Form 4868 (Automatic Extension to August 14th) or Form 2350 (Request for Additional Time). This form is DUE APRIL 14th!
NOTE FOR FIRST YEARS: DO NOT FILE your 1040 on April 14th unless you will meet the Physical Presence Test at that time! Only file your extension paperwork! If you file your 1040 BEFORE you meet the Physical Presence Test, you will LOSE THE EXCLUSION! So, make sure you get that extension permission paperwork in!
The next step is to collect your documents. You should have received a statement from your base school that indicated how much money you earned in 2003. Also, collect any W2s or 1099s you might have, or any other statements you'll need to attach. Find out from your bank about interest earnings you might have made, and if you have student loans, your lender should have sent a letter indicating your tax-deductible payments.
BY APRIL 14th, you need to figure out your taxes, even though you may not file your 1040 at that time. This is because ALL PAYMENTS ARE DUE APRIL 14th, regardless of any extensions to file you may receive! To do this, you will need Form 1040 (or 1040A as the case may be) and Form 2555-EZ (to figure the Foreign Earned Income Exclusion). The official exchange rate on the US Embassy website is 113.873 yen/dollar for 2003.
Now that you've figured your tax, send any payment by April 14th. You can send your payment with your extension request paperwork.
Last, DON'T FORGET YOUR STATE TAX! I can only help folks from Illinois here. Most State tax offices have websites with downloadable forms. You can go here and click on your state to find its site.
Handcuff-Prevention Tips:
-Get started early! If you have a lot of special circumstances (i.e. you can be claimed as a dependent by your parents for the year, can claim student loan interest, etc.) this will take more time than usual!
-Have a friend check your math!
-Photocopy everything!
-Call or e-mail the IRS with case-specific questions!
-Pay on time!
-Just hire a professional to figure it out for you! (chicken!)