Publication 54 - Tax Guide For U.s. Citizens And Resident Aliens Abord - 2011 Page 8
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44amounts you expect to exclude under the for-
under penalties of perjury. However, if your em-
eign earned income exclusion and the foreign
ployer has reason to believe that you will not
2.
qualify for either the foreign earned income or
housing exclusion. In addition, you can reduce
the foreign housing exclusion, your employer
your income by your estimated foreign housing
must continue to withhold.
deduction. However, you must estimate tax on
In determining whether your foreign earned
Withholding Tax
your nonexcluded income using the tax rates
income is more than the limit on either the for-
that will apply had you not excluded the income.
eign earned income exclusion or the foreign
If the actual amount of the exclusion or deduc-
housing exclusion, if your employer has any
tion is less than you estimate, you may have to
information about pay you received from any
pay a penalty for underpayment of estimated
Topics
other source outside the United States, your
tax.
This chapter discusses:
employer must take that information into ac-
For more information about figuring your es-
count.
•
Withholding income tax from the pay of
timated tax, see Publication 505.
Foreign tax credit. If you plan to take a for-
U.S. citizens,
eign tax credit, you may be eligible for additional
•
Withholding tax at a flat rate, and
withholding allowances on Form W-4. You can
•
take these additional withholding allowances
Other Forms You
Social security and Medicare taxes.
only for foreign tax credits attributable to taxable
May Have To File
salary or wage income.
Useful Items
Withholding from pension payments. U.S.
You may want to see:
payers of benefits from employer-deferred com-
Form TD F 90-22.1. You must file Form TD F
pensation plans, individual retirement plans,
Publication
90-22.1, Report of Foreign Bank and Financial
and commercial annuities generally must with-
Accounts, if you had any financial interest in, or
505
Tax Withholding and Estimated Tax
hold income tax from payments delivered
signature or other authority over, a bank, securi-
outside of the United States. You can choose
ties, or other financial account in a foreign coun-
Form (and Instructions)
exemption from withholding if you:
try. You do not need to file the report if the assets
•
Provide the payer of the benefits with a
673
Statement For Claiming Exemption
are with a U.S. military banking facility operated
residence address in the United States or
From Withholding on Foreign
by a U.S. financial institution or if the combined
a U.S. possession, or
Earned Income Eligible for the
assets in the account(s) are $10,000 or less
Exclusion Provided by Section 911
•
Certify to the payer that you are not a U.S.
during the entire year.
citizen or resident alien or someone who
W-4 Employee’s Withholding Allowance
More information about the filing of Form TD
left the United States to avoid tax.
Certificate
F 90-22.1 can be found in the instructions on the
back of the form.
W-9 Request for Taxpayer Identification
Check your withholding. Before you report
Number and Certification
U.S. income tax withholding on your tax return,
FinCen Form 105. You must file Form 105,
you should carefully review all information docu-
See chapter 7 for information about getting
Report of International Transportation of Cur-
ments, such as Form W-2, Wage and Tax State-
this publication and these forms.
rency or Monetary Instruments, if you physically
ment, and the Form 1099 information returns.
transport, mail, ship, or cause to be physically
Compare other records, such as final pay rec-
transported, mailed, or shipped into or out of the
ords or bank statements, with Form W-2 or Form
Income Tax
United States, currency or other monetary in-
1099 to verify the withholding on these forms.
struments totaling more than $10,000 at one
Check your U.S. income tax withholding even if
Withholding
time. Certain recipients of currency or monetary
you pay someone else to prepare your tax re-
turn. You may be assessed penalties and inter-
instruments also must file Form 105.
est if you claim more than your correct amount of
U.S. employers generally must withhold U.S.
More information about the filing of Form 105
withholding allowances.
income tax from the pay of U.S. citizens working
can be found in the instructions on the back of
abroad unless the employer is required by for-
the form.
eign law to withhold foreign income tax.
30% Flat Rate
Form 8938. You must file new Form 8938 re-
Foreign earned income exclusion. Your em-
port the ownership of specified foreign financial
ployer does not have to withhold U.S. income
Withholding
taxes from wages you earn abroad if it is reason-
assets if the total value of those assets exceeds
able to believe that you will exclude them from
an applicable threshold amount (the “reporting
income under the foreign earned income exclu-
Generally, U.S. payers of income other than
threshold ”). The reporting threshold varies de-
sion or the foreign housing exclusion.
wages, such as dividends and royalties, are
pending on whether you live in the United
Your employer should withhold taxes from
required to withhold tax at a flat 30% (or lower
States, are married, or file a joint income tax
any wages you earn for working in the United
treaty) rate on nonwage income paid to nonresi-
return with your spouse. Specified foreign finan-
States.
dent aliens. If you are a U.S. citizen or resident
cial assets include any financial account main-
alien and this tax is withheld in error from pay-
tained by a foreign financial institution and, to
Statement. You can give a statement to
ments to you because you have a foreign ad-
the extent held for investment, any stock, securi-
your employer indicating that you expect to qual-
dress, you should notify the payer of the income
ties, or any other interest in a foreign entity and
ify for the foreign earned income exclusion
to stop the withholding. Use Form W-9 to notify
any financial instrument or contract with an is-
under either the bona fide residence test or the
the payer.
physical presence test and indicating your esti-
suer or counterparty that is not a U.S. person.
You can claim the tax withheld in error as a
mated housing cost exclusion.
You may have to pay penalties if you are
withholding credit on your tax return if the
Form 673 is an acceptable statement. You
required to file Form 8938 and fail to do so, or if
amount is not adjusted by the payer.
can use Form 673 only if you are a U.S. citizen.
you have and understatement of tax due to any
You do not have to use the form. You can pre-
Social security benefits paid to residents. If
transaction involving an undisclosed foreign fi-
pare your own statement. See a copy of Form
you are a lawful permanent resident (green card
nancial asset.
673, later.
holder) and a flat 30% tax was withheld in error
More information about the filing of Form
Generally, your employer can stop the with-
on your social security benefits, the tax is re-
8938 can be found in the separate instructions
holding once you submit the statement that in-
fundable by the Social Security Administration
for Form 8938.
cludes a declaration that the statement is made
(SSA) or the IRS. The SSA will refund the tax
Chapter 2 Withholding Tax
Page 8
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