I searched through some previous threads, but didn't find the answer for which I was looking. Can someone explain how the tax process works for an American, working as a contract employee for a US-based company here in ARG and getting paid in pesos? I had to complete a W-9, but I get paid in pesos. How do I file for US taxes?
working ain ARG and US taxes
- Thread starter luddite
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First, talk to an accountant that specializes in foreign earned income. I am not an accountant.
If you are a US citizen, you must still file US taxes. Be sure to fill out form 2555 which will allow you to claim an exemption of just under $90K USD for your foreign earned income. In other words, as long as you make less than this amount, you will not owe any US taxes. You must, however, still complete a US tax return even if you do not owe any tax. Tax returns are completed in USD, so you will just convert the Pesos back to dollars for the purposes of completing your return.
Check out the IRS website and do a search for form 2555. You will find lots of details. The key is to being eligible for this exemption is that you must live outside the US for 330 calendar days per year (physical presence test).
There is also the issue of income taxes in Argentina. Technically speaking, you would owe income tax in Argentina if you are present in this country more than 180 days per calendar year. Argentina does not have a tax treaty with the US.
If you are a US citizen, you must still file US taxes. Be sure to fill out form 2555 which will allow you to claim an exemption of just under $90K USD for your foreign earned income. In other words, as long as you make less than this amount, you will not owe any US taxes. You must, however, still complete a US tax return even if you do not owe any tax. Tax returns are completed in USD, so you will just convert the Pesos back to dollars for the purposes of completing your return.
Check out the IRS website and do a search for form 2555. You will find lots of details. The key is to being eligible for this exemption is that you must live outside the US for 330 calendar days per year (physical presence test).
There is also the issue of income taxes in Argentina. Technically speaking, you would owe income tax in Argentina if you are present in this country more than 180 days per calendar year. Argentina does not have a tax treaty with the US.
gouchobob
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luddite said:
You have to file a U.S. tax return but your earning there (up to 80k, I believe) are exempt from U.S. taxes. You are supposed to pay Argentine income taxes. The bad news is that Argentine tax rates are higher than those in the U.S.
steveinbsas
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The annual exclusion is now $87,600, but social security (FICA) taxes may still be owed if you aren't paying into a similar fund here. You must reside outside the US for at least 330 days of the year to qualify for the exclusion, which applies only to earned income (as opposed to rents).
http://www.taxmeless.com/page4.html
http://www.taxmeless.com/page4.html
I highly recommend you speak to a US tax accountant that specializes in these matters.
It is my understanding that the exclusion is tied to certain tax-equalization agreements that the US have with some (but not all) countries.
I won't accept a foreign assignment unless the contract states that the employer will pick up any and all expenses associated with double filings and double taxation. -Foreseen or unforeseen.
Neil
It is my understanding that the exclusion is tied to certain tax-equalization agreements that the US have with some (but not all) countries.
I won't accept a foreign assignment unless the contract states that the employer will pick up any and all expenses associated with double filings and double taxation. -Foreseen or unforeseen.
Neil
