US tax return - Form 1116 Foreign tax credit

Posted by schiang (405 days ago)

Hi

I am US citizen working in Hong Kong. Can anyone advise what tax period to be used for the Form 1116 foreign tax credit ? Do I follow the HK tax period such as Apr 05 - Mar 06 or 3 months of actual tax (Jan - Mar 06) plus 9 months provisional tax (Apr - Dec 06) ?

(I am based in Hong Kong)

Posted by msnglnk (401 days ago)

thats interesting. i didn't know i could file for a foriegn tax credit. i have been living in china for years and paying taxes (i think). but no employer has given me legal doumentation of taxes withheld. i have already filed my taxes but i'll keep this in mind for next year.

i am not sure how you file your taxes but this is what i have been doing:

every year i just complete a 1040ez claiming just enough income to get the maximum "earned income credit" (EIC). and i also complete and submit my states (mn) form so i can get the "working family credit".

all i do is on line 1 (gross income) of the 1040ez i fill in the amount of my gross income. but then i have to write the same numbers to the immediate left and highlight them. and then complete the form.

(I am based in Shanghai)

Posted by jwm (400 days ago)

You have up to 3 years to amend prior years tax returns. WIth an $80,000 US foregin income exclusion, it's well worth to look into it. It is also wwell worth a few bucks to hire a pro and not do the "EZ" form while living abroad. You are missing out on $$$ espically if you do not make a very high slaary...

The way you are doing your taxes now, you are just screwing yourself

(I am based in Hong Kong)

Posted by msnglnk (400 days ago)

ok i'll look into it more. i like the idea of getting more money. what kind of money you talkin about?

even if i did truthfully claim my gross income for the year it would still be below the poverty level (according to the irs).

everyone of my employers say that they withhold taxes from my monthly pay but they've never given me any legal proof. wouldn't the forms and/or schedules you refer to require legal documentations?

(I am based in Shanghai)

Posted by jwm (400 days ago)

You are entilted to an $80,000 US foregin income credit which goes against any wages you make outside the country, so sounds like it's going to be worth while for you to look into

(I am based in Hong Kong)

Posted by msnglnk (400 days ago)

yes i like the sounds of that. but if it seems too good to be true it usually is.

so you got any tax pro's in mind? or maybe you are one?

my email: msnglnkus@yahoo.com

(I am based in Shanghai)

Posted by jwm (400 days ago)

I am not a tax professional, no, but in Shanghi, you will have dozens of options

(I am based in Hong Kong)

Posted by msnglnk (396 days ago)

i did contact a "tax pro". and the $80,000 you speak of is not a credit for income earners abroad. but it is a "tax break" or "exemption" one can claim on his/her income earned abroad.

(I am based in Shanghai)