[overc64]

Hello,

I think this is one of the best help-sites I have come across and all the responses that I have reviewed from others have been sincere, interesting and educational. But now I have a questions related to taxes and it is this. In a nutshell:

I work for a public telecom company who will be sending me to Iraq in November for a year. While there, I will be living in a military base, either a bunker or some type of tent. I live in Texas, have a house that I am paying a mortgage on and my family is staying there until my return next November. I have been told that there is a certain tax break for civilians who go overseas for a year, even though they get paid well over $100,000 during their stay.

What would that tax break be and if you know, can you point out any IRS references to it. Thank you, your response is sincerely appreciate.

Ricco...

[Fr_Chuck]

Normally if you stay overseas for a year or more, the income is not subject to US taxes ( state or federal) So you should make the money tax free.

If you are not overseas for the entire year, the money will normally be taxable.

I don't know the exact part of the law, but this is how they explained it to me when a company wanted me to do the same thing a few years ago.

[AtlantaTaxExpert]

What Fr Check refers to is the Foreign Tax Exclusion. The amount excludes from income tax (Social Security and Medicare taxes are still collected) is $80,000 per year.

If you get paid $100K, you will pay some income tax, but not too much.

[overc64]

Thanks Fr_Chuck and Atlanta Tax Expert, hope all goes well as I am due to ship out Nov. 1st. The sooner I leave, the sooner I can get back and pickup from where I left off.

[AtlantaTaxExpert]

Glad to help!