It's tax time and I'm having trouble finding accurate information on how to accurately lodge my return (considering that I'm an Australian citizen working in the US on an E-3 visa). I have a couple of questions that I'm hoping someone can help me with (or point me in the right direction):

1. I have been working in the US for a US employer since May 15, 2007. My employer told me at the time that because I am not a US citizen I would not need to pay social security or medicare taxes. I now have reason to believe (based on my own research) that these taxes should have been deducted from my income. Can anyone confirm either way?

2. From January 1, 2006 to March 10, 2006 I was working in Australia for an Australian company (in no way related to the US, or my current US employer). Turbo Tax is saying that I qualify for the foreign income exclusion, although I am a little skeptical. Does anyone know whether I qualify?

3. Do I need to declare my Australian income on my US tax return?

Any assistance that anyone could provide on the above would be much appreciated.

Thanks

1) I agree with you; SS and Medicare taxes should have been withheld. However, it's too late for your employer to do so now without him incurring some huge fines. Tell him of your new status and ask that SS and Medicare taxes be withheld staring at once.

2) If you are single, you MUST file as a dual-status alien, which means you claim ONLY your U.S.-based income. No need for either the Foreign Income Exclusion or the Foreign Tax Credit.

3) No.