Background: I arrived in Iraq on 27 May 2009, I did not go back to the states until 28 March 2010, for a total of about 300 days. I left the states again on 30 April 2010, for a total of about 33 days in the states. I want to go back to the states for about 8 days from 20 Aug-28 Aug 2010. I will not return to the states again until May of 2011. So from May 2009 to May 2011 I would only be in the states for the 33 days and 8 days respectively.

Question: If I go back for that 8 days will I end up having to pay full taxes on my 2010 tax return? Will I have busted my Physical Presence test?

I hope to hear from you soon, I need to buy tickets.

Thanks, Matt

Matt:

Are you a foreign national? If so, what kind of visa?

OR

Are you a U.S. citizen?

US citizen

You qualify to claim the Foreign Earned Income Exclusion, if that is what you are asking.

Would you mind explaining it to me using my scenario? I hope you don't mind. I read Pub 54, pages 14-16 and still don't really understand the overlapping months and so on. Does it matter if I already completed my 2009 taxes?

Physical presence is met if you are in Iraq for 330 days out of a 365-day period.

Your first FULL day in Iraq was 28 May 2009, so you spent 304 FULL ays in Iraq before returning to the U.S. Your NEXT full day was 1 May 2010, and the 365 period ended on 27 May 2010, so you ended the 365 period with 27 days in Iraq.

Do the math: 304 + 37 is 331, so you met the criteria for Physical Presence, and could claim the Foreign Earned Income Exclusion on a pro-rated basis for the 2009 tax return.

The NEXT 365-day period begins on 28 May 2010. As long as stay in Iraq for 330 FULL days between 28 May 2010 and 27 Mat 2011, you will continue to meet the criteria for Physical Presence.