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1040NR or 2555(Foreign Earned Income)

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    1040NR or 2555(Foreign Earned Income)

    Have read instructions to both these forms and am still unclear how I should file.

    I have a client who moved back to the Middle East. He was born overseas but became a U.S. citizen while he lived and worked in the U.S. for about 10 years. He filed U.S. tax returns during all this time. He moved back overseas a couple of years ago and is employed by a foreign company, married and has a child. He has not ruled out moving back to the U.S. at some point. Should I be reporting his income under Form 2555 and claim the foreign earned income exemption rule or do I need to file 1040NR and actually pay U.S. tax on this income ?

    Thanks....

    #2
    1040nr/2555

    What's important is which country is he a citizen?

    If a U. S. citizen- then he should file a 1040 and complete Form 2555 provided he qualifies.

    If a citizen of a foreign country and works for a U. S. company, then I believe it would be appropriate to file the 1040NR.
    Uncle Sam, CPA, EA. ARA, NTPI Fellow

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      #3
      Originally posted by MariaMc View Post
      I have a client who moved back to the Middle East. He was born overseas but became a U.S. citizen while he lived and worked in the U.S. for about 10 years. He filed U.S. tax returns during all this time. He moved back overseas a couple of years ago and is employed by a foreign company, married and has a child. He has not ruled out moving back to the U.S. at some point. Should I be reporting his income...
      If he has still been a U.S. citizen, then he must report all of his worldwide income on a U.S. tax return if there is enough of that income to have a filing requirement. If he meets the qualifications, some of that income might be excluded from tax under the foreign earned income exclusion.

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