Ask Experts Questions for FREE Help !
Ask

Foreign earned income

Asked Jun 9, 2009, 03:39 PM — 3 Answers
This is a question for US 2008 return. I worked in the US for the first half of 2007 and then went to work in the UK for the rest of 2007. My 2007 bonus was paid in 2008. I also worked in the UK for the entire 2008. Would it be possible to consider my whole 2007 bonus as foreign earned income? Or do I have to split half as US earned and the other half as foreign earned?

I'm trying to claim foreign tax credit on my return and it makes a big difference if I can consider the whole bonus as foreign earned. I'm not planning to do foreign earned income exclusion since it doesn't give as much benefit as the claiming foreign tax credit.

Search this Thread
Share |
3 Answers
MukatA's Avatar
MukatA Posts: 7,106, Reputation: 963
Tax Expert
  
#2

Jun 10, 2009, 01:20 AM


If bonus was paid in 2008, then it is the income to be reported on 2008 tax return. If you were working in UK when you got the bonus, then it is UK income.
Helpful
AtlantaTaxExpert's Avatar
AtlantaTaxExpert Posts: 19,886, Reputation: 3728
Senior Tax Expert
  
#3

Jun 10, 2009, 07:29 AM


Agreed; your locus when you receive the bonus determines whether it is foreign income or not.
Helpful
IntlTax's Avatar
IntlTax Posts: 812, Reputation: 118
Tax Expert
  
#4

Jun 10, 2009, 01:32 PM


It doesn't matter where you are when you receive the income. It matters where you are when you perform the services. If the 2007 bonus was partly for services rendered in the U.S. And partly for services rendered in the U.K., you need to split the bonus between the two countries. It may make the most sense to apportion the bonus using your base salary earned in the U.S. In 2007 and your base salary earned in the U.K. In 2007.
Helpful
Not your question? Ask your question View similar questions
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search

Add your answer here.

Remove Text Formatting
 

Undo
Redo
  
Decrease Size
Increase Size
Bold
Italic
Underline
Align Left
Align Center
Align Right
Ordered List
Unordered List
Decrease Indent
Increase Indent
Insert Email Link
Wrap [QUOTE] tags around selected text
Wrap [CODE] tags around selected text
Wrap [HTML] tags around selected text
Wrap [PHP] tags around selected text
Wrap [YOUTUBE] tags around selected text
Notification Type:



Check out some similar questions!

Foreign Earned Income [ 7 Answers ]

I am currently working in Germany. I am a US citizen, but my wife is a German national. She is not a registered alien, but she does posses a ITIN for tax purposes. We are filing a joint tax return. Because she does not work for a you. S. Entity she does not pay U.S. Taxes and therefore does...

Foreign earned income [ 1 Answers ]

I worked three month abroad and need to report on Form 1040 foreign earned income. Where do I report the income I earned from the foreign country and where do I report the tax withhold by the freign country? Do I need to report the foreign earned income on my state tax return as well?

Tax on Foreign Earned Income - NRO [ 5 Answers ]

I am a resident alien and I have a NRO certificate of deposit in India. If I understand correctly I need to report interest income earned in India also. 30% tax is already being deducted at source by the Indian bank on the interest I earn in India. Do I have to pay taxes in US too ? Or can...

Foreign earned income [ 3 Answers ]

I have a couple of questions, my husband is a resident of Georgia, he works for a contractor in California, where he has an apartment, he deploys overseas where he works for at least three months at a time. He worked overseas last year for a total of about eight months. His income is being taxed...

View more Taxes questions Search