Virgin Island Income

[mobile_taxman]

Client (US Citizen) worked in US Virgin Islands for 8 months and has W-2VI - looks similar to US W-2 - except there is no state income tax. Box 2 is titled VI Income tax withheld. Client also has US W-2.

Input regarding how to handle this on US tax return including Form 8689, from anyone with experience in dealing with income from VI sources will be apprecited.

[Zee]

You should find your answer at this website:

http://www.vimovingcenter.com/island_living/taxes.php

[mobile_taxman]

VI Income Tax Withheld

Zee,

Thanks for the link. This website does not give info on how to treat VI Income Tax withheld (Box 2 of VI W-2) - any input on this?

[Zee]

I don't have any experience with VI tax returns, but I'm not sure if I understand your question. I would assume, however, that when you complete the 1040 you would treat VI Income Tax Withholding the same as US Withholding, and it will reduce any taxes due, or create a refund.

[WhiteOleander]

Look on the IRS site for the form 8689. Read the instructions for filing the return for the Virgin Island tax return. The instructions then explain how to list the credit for the tax paid to the VI on the Federal 1040.

HTH

[Nashville]

A hearty welcome

..to the mobile_taxman. That means you move around alot, right?

By the way, what's the latest on the brilliant idea to do away with the FIT deduction on Alabama taxes? It is NOT revenue neutral or else they wouldn't be fooling around with it.

Actually, good to have you join us, and you pose a very good question. Lots of good discussion and fun here. Sometimes we even have Dinner-On-The-Ground. Boss man actually once e-mailed a White Castle to someone on the West Coast. Not without taking a big bite out of it first though...

[TaxLadyinPA]

IRS website

Maybe this will help

http://www.irs.gov/businesses/small/international/article/0,,id=97321,00.html