by joannecalvin2There is much confusion about what constitutes foreign earned income with respect to the residency location, the location where the work or service is performed, and supply of the salary or fee pay out. Foreign residency or extended periods abroad for the tax payer is really a qualification to avoid double taxation.
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The employer probably pays the waitress a quite small wage, that is allowed under many minimum wage laws because she’s got a job that typically generates tips. The IRS might therefore believe my tip is paid «for» the business. But I am under no compulsion to leave the waitress anything. The employer, on the other half hand, is obliged to fund the services his workers render. So i don’t think the exception under Section 102 provides. If the tip is taxable income to the waitress, basically under total principle of Section sixty one.
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The increased foreign earned income exclusion, increased tax bracket income levels, and continuation of Bush era lower tax rates are all good news several American expats. Tax rules for expats are precisely designed. Get the professional guidance you really should file your return correctly and minimize your U.S. tax.
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