Utterly Taxing: An Expat’s Filing Saga - Part Three
by Sarah M. Duncan

“So,” my Mother said, chuckling over the phone, “does this mean you’re going to become some kind of …tax expert?” 

Parents are cute.

I had recently informed my mother that my quirky perspective and light speed typing skills were being used for good, not evil. Given my past history with finances, not to mention my complete lack of math or business capabilities, she was finding the whole thing rather amusing.

My mother knows, as well as I do, that the likelihood I will become anything other than an informed layperson is as likely as my brother learning to love mushrooms, hippies giving up their fight for legalized marijuana, or Ellen Degeneres marrying Rush Limbaugh. 

“Well, what do you write about then?” she pressed. “If you aren’t giving advice on taxes, what do you do?”

She’s not the first person to ask that question. My family and friends are pleased I’m writing for someone other than my Facebook friends, but they remain a bit baffled. I’ve tried the easy way: the easy way being sending them the link to the website, but for a strange reason, the ‘link’ won’t work.

“It’s a blog,” I explain. “Except instead of talking about Justin Bieber and how hard a middle class teenage American life is, I prattle on about filing my expatriate taxes.” It may not sound riveting, I assured her, but I use plenty of charm to keep the articles afloat.

“Besides,” I continued. “I write about filing taxes in general, not just my personal expatriate tax return. There are a lot of things, like form 1040, or certain terms and policies most travelers are simply oblivious to…”

“Like?”
“Like…” I fidgeted with the draw string of my hooded sweatshirt. “Like ‘foreign earned income exclusion.’”
“Which is...?” What was this, a courtroom?
“Oh, I don’t know,” I said flippantly, and began to change the subject.

Wait a second, I thought, phone to my ear, looking at myself accusingly in the mirror.
I don’t know? I don’t know?!
I didn’t know.
How embarrassing. Too embarrassing. Isn’t it my job as a writer to understand my topic? As a citizen, to understand where my money is going and why?

The answer is yes, which is why I quickly got to work researching. I haven’t figured it all out quite yet, but be patient with me. I’ll get there.

Here is what I know (so far) about Foreign Earned Income Exclusion:
First of all, for people like me who in their year abroad won’t make any more than ten thousand (foreign) dollars, great news! You’re exempt from income tax. In fact, you’re exempt from income tax unless you make more than approx. 80-90,000 dollars overseas [contact Ed for official number, it seems to vary in my research.] So unless you’ve got a ‘real’ job on the other side of the Atlantic and/or Pacific, you’ll probably end up making more than that sum and will have to cough up your share.  But for most backpackers only working as cleaners, childcare relievers, and apple pickers, chances are good you won’t have to worry about being taxed on anything under ninety grand.

After that, you have to figure out if you qualify for certain deductions and exclusions based on two tests: a Bona Fide Residence Test and a Physical Presence Test. As far as I understand it, these are not multiple choice tests, but more of a ‘rule of thumb’ than a series of questions. However, Tax Planner CPA does have a cool online test that gives you a good idea of whether you qualify for the foreign earned income exclusion (or not). It can be found here:
http://taxplannercpa.com/foreign-earned-income-exclusion-eligilibility.php

So no, Mother dearest, tax expert I am not, nor will I ever be. But I’ve got one piece of the puzzle gleaming in my hand.
At the end of this journey, perhaps I’ll have a picture.