Publication 54 - Tax Guide For U.s. Citizens And Resident Aliens Abord - 2011 Page 41
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44country has its source in that coun-
and meet either the bona fide resi-
year. The other tests of depen-
RRB-1099, Payments by the Rail-
try. The foreign earned income ex-
dence test or the physical presence
dency also must be met.
road Retirement Board, that you re-
test.
clusion and the foreign housing
ceive from the Railroad Retirement
3) Should I prorate my own per-
exclusion or deduction are limited
Board. The taxable amounts of the
sonal exemption and the exemp-
4) My wife and I are both em-
to earned income from sources
non-social security equivalent part
ployed, reside together, and file
tions for my spouse and
within foreign countries.
of tier 1, tier 2, vested dual benefits,
a joint return. We meet the quali-
dependents, since I expect to ex-
and supplemental annuities are
fications for claiming the foreign
clude part of my income?
Foreign Earned
shown on the Form RRB-1099-R,
earned income exclusion. Do we
Income Exclusion
Annuities or Pensions by the Rail-
each figure a separate foreign
No. Do not prorate exemptions.
road Retirement Board, that you re-
earned income exclusion and
Claim the full amount for each ex-
1) I qualify for the foreign earned
ceive from the Railroad Retirement
foreign housing exclusion?
emption permitted.
income exclusion and earned
Board.
more than $92,900 during 2011.
You figure your foreign earned in-
Social Security and
Am I entitled to the maximum
Social Security Tax
come exclusion separately since
Railroad Retirement
$92,900 exclusion?
and Self-Employment Tax
you both have foreign earned in-
Benefits
come. The amount of the exclusion
Not necessarily. Although you
for each of you cannot exceed your
1) I am a minister with earned
1) Are U.S. social security bene-
qualify for the foreign earned in-
separate foreign earned incomes.
income from abroad and expect
fits taxable?
come exclusion, you may not have
to qualify for the foreign earned
You must figure your housing
met either the bona fide residence
income exclusion. How do I pay
exclusion jointly. See Married
Benefits received by U.S. citizens
test or the physical presence test
my self-employment tax?
Couples in chapter 4 for further de-
and resident aliens may be taxable,
for your entire tax year. If you did
tails.
depending on the total amount of
not meet either of these tests for
File a Form 1040 with Schedule SE
income and the filing status of the
your entire tax year, you must pro-
Exemptions and
and Form 2555. Figure your
taxpayer. Under certain treaties,
rate the maximum exclusion based
Dependency Allowances
self-employment tax on Schedule
U.S. social security benefits are ex-
on the number of days that you did
SE and enter it on Form 1040 as
empt from U.S. tax if taxed by the
meet either test during the year.
the tax due with the return.
1) I am a U.S. citizen married to a
country of residence.
nonresident alien who has no in-
2) How do I qualify for the foreign
Benefits similar to social secur-
2) Because I expect to qualify for
come from U.S. sources. Can I
earned income exclusion?
ity received from other countries by
the foreign earned income exclu-
claim an exemption for my
U.S. citizens or residents may be
sion, I have requested and re-
spouse on my U.S. tax return?
To be eligible, you must have a tax
taxable. (Refer to our tax treaties
ceived an extension of time until
home in a foreign country and be a
with various countries for any ben-
January 30, 2013, to file my 2011
Yes. If you file a joint return, you
U.S. citizen or resident alien. You
efit granted by the treaty.)
return. However, since I will be
can claim an exemption for your
must be either a bona fide resident
paying self-employment tax on
nonresident alien spouse. If you do
2) As a U.S. citizen or resident
of a foreign country or countries for
my spouse’s income, should I
not file a joint return, you can claim
alien, how do I figure the amount
an uninterrupted period that in-
file a 2011 return when due, pay
an exemption for your nonresident
of my U.S. social security bene-
cludes an entire tax year, or you
the self-employment tax, and
alien spouse only if your spouse
fits to include in gross income?
must be physically present in a for-
then file another return when I
has no income from sources within
eign country or countries for at
qualify for the exclusion?
the United States and is not the
See Publication 915, Social Secur-
least 330 full days during any pe-
dependent of another U.S. tax-
ity and Equivalent Railroad Retire-
riod of 12 consecutive months.
No. You do not need to file a 2011
payer.
ment Benefits, to figure if any of
U.S. citizens may qualify under ei-
Form 1040 (the regular income tax
You must use the married filing
your benefits are includible in in-
ther test. The physical presence
return) when due if you have re-
separately column in the Tax Table
come.
test applies to all resident aliens,
ceived an extension. Instead, you
or section C of the Tax Computa-
while the bona fide residence test
should pay enough estimated tax
tion Worksheet, unless you qualify
3) How are railroad retirement
applies to resident aliens who are
to cover the self-employment tax
as a head of household. (Also see
benefits taxed?
citizens or nationals of a country
and any income tax that would be
Question 12 under General Tax
with which the United States has an
due after taking out the amount of
Questions, later.)
The part of a tier 1 railroad retire-
income tax treaty in effect.
excludable income.
A U.S. citizen or resident alien
ment benefit that is equivalent to
Your tax home must be in the
married to a nonresident alien also
the social security benefit you
Income Tax Withholding
foreign country or countries
can choose to treat the nonresident
would have been entitled to receive
throughout your period of resi-
alien as a U.S. resident for all fed-
if the railroad employee’s work had
dence or presence. For this pur-
1) How can I get my employer to
eral income tax purposes. This al-
been covered under the social se-
pose, your period of physical
stop withholding federal income
lows you to file a joint return, but
curity system rather than the rail-
presence is the 330 full days during
taxes from wages while I am
also subjects the alien’s worldwide
road retirement system is treated
which you are present in a foreign
overseas and eligible for the for-
income to U.S. income tax.
the same as a social security bene-
country, not the 12 consecutive
eign earned income exclusion?
fit, discussed above.
months during which those days
2) I support my parents who live
The other part of a tier 1 benefit
File a statement in duplicate with
occur.
in Italy. I am sure that I provide
that is not considered a social se-
the bulk of their support. Can I
your employer stating that with-
curity equivalent benefit is treated
3) Is it true that my foreign
claim exemptions for them?
holding should be reduced be-
like a private pension or annuity, as
earned income exclusion cannot
cause you meet the bona fide
are tier 2 railroad retirement bene-
exceed my foreign earned in-
It depends on whether they are
residence test or physical presence
fits. Pensions and annuities are ex-
come?
U.S. citizens or U.S residents. If
test. See also the following ques-
plained in chapter 4 under Earned
your parents are not U.S. citizens
tion.
and Unearned Income. Vested
Yes. The amount of the exclusion is
or U.S. residents, you cannot claim
dual benefits and supplemental an-
limited each year to the amount of
exemptions for them even if you
2) Does the Internal Revenue
nuities are also treated like private
your foreign earned income after
provide most of their support. To
Service provide forms to be
pensions, but are fully taxable.
reducing that income by the foreign
qualify as a dependent, a person
used by employees requesting
housing exclusion. The foreign
The proper amounts of the so-
generally must be either a U.S. citi-
employers to stop withholding
earned income must be earned
zen, U.S. national, U.S. resident
cial security equivalent part of tier 1
income tax from wages they ex-
during the part of the tax year that
alien, or a resident of Canada or
benefits and any special guaranty
pect to be excluded as income
you have your tax home abroad
Mexico for some part of the tax
benefits are shown on the Form
earned abroad?
Publication 54 (2011)
Page 41
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