Foreign Income, moving expense, etc.

[MariaR08]

Hi!

I'm a new tax preparer and I've come here for some help. Being new and all... I didn't want to turn away a new client (my friend's cousin). But her situation seems complex and I'm not sure where to start researching. If anybody here has some experience or is highly knowledgeable in this area... would you be willing to help me out?

Here's some tidbits of info:

client had dual citizenship: U.S. and Mexico
moved from U.S. to Mexico for a new job (asked about moving expenses being deductible)
does not have high income
received pay in Mexico in Mexican currency, pesos (asked if needed to report that)

I know that as a U.S. citizen you are taxed on global income so it would be reported and taxable. But since she is also a citizen of Mexico - does that exclude her from reporting Mexico income to U.S.? I think I have to get exact dates as to when she moved and so forth... because the residency test might help here...?

Either way, a little guidance from a tenure preparer would be very helpful... point me in the right direction and advise me where and how to start?

Thanks in advance!

Maria

[erchess]

One piece of the puzzle

is the fact that a large chunk of foreign earned income can sometimes be excluded from US Tax by filing Form 2555 or Form 2555EZ. So that's where I would start.

Another factor is how you convert Pesos to Dollars and it has been so long since I converted foreign currency that I will defer that and the rest of your questions to someone more knowledgeable.

[Bees Knees]

TTB links page, http://www.thetaxbook.com/links.asp?...y=General#link has a link to historical currency exchange rates that will allow you to convert pesos to dollars for purposes of knowing what amount to report on Form 2555 for the foreign earned income exclusion. TTB links page also has a link to IRS Publications. Find IRS Pub 54. On page 4 it covers foreign currency and how and when you convert it to U.S. dollars on the tax return.