Bonafide Resident/Physical Presence for FEI excluion

Blues · Post by **Blues** » Mon Mar 08, 2010 9:43 pm

Thank you very much DBS. I have one more question.

1.Can I claim moving expenses(air tickets) from US to India for my family?

2.Should I refund this amount incase I return to US in future?

Thanks

dbs · Post by **dbs** » Mon Mar 08, 2010 10:19 pm

Blues;266494Thank you very much DBS. I have one more question.

1.Can I claim moving expenses(air tickets) from US to India for my family?

2.Should I refund this amount incase I return to US in future?

Thanks

I am no tax expert.
I do not think Indian Income Tax will allow air tickets as expenses. I do not know anything about US IT.

vsblr · Post by **vsblr** » Thu Mar 11, 2010 10:56 pm

I am trying to figure out the same thing regarding moving expenses as a deductible for filing US taxes: I saw the foll instructions for 1040NR (pg 16): "The deduction generally is limited to moves to or within the United States or its possessions. If you meet these requirements, see Pub. 521." Also see Pub 519, pg 26 = "You cannot deduct the moving expense you have when returning to your home abroad or moving to a foreign job site".

However Pub 521 http://www.irs.gov/pub/irs-pdf/p521.pdf seems to OK a move to a new location in another country. I dont know why the different interpretation.

Edit: I also this thread which suggests it is ok to claim these expenses. http://www.r2iclubforums.com/forums/showthread.php/13227-Moving-to-India-can-I-deduct-moving-expenses

Blues · Post by **Blues** » Mon Mar 15, 2010 9:16 pm

I think moving expenses can be claimed only if you are filing 1040 and not 1040NR.

I reviewed the IRS Pub 54 which provides detail about the moving expenses and Foreign earned income exclusion.According to that you can claim moving expenses with certain conditions. I am not sure if we can claim Per diem that the other thread is talking about.

r2i_007 · Post by **r2i_007** » Sun May 02, 2010 5:00 pm

Hi,

I am a USC. I came back from vacation in India in mid Jan 2009 and relocated back to India in Mar 2009.
I am trying to figure out if I qualify for the FEI exclusion based on bonafide residence or physical presence test for tax year 2009.

Based on my understanding, both are applicable for the entire tax year Jan 1-Dec 31. This means unless someone moved overseas starting Jan 1st of the year and remained beyond Dec 31 of the year, they would not qualify to a be a bonfaide resident for the tax year. Also, the 330 days for the physical presence is from Jan 1-Dec 31st, correct?

1. Since I was not in India for entire tax year 2009, I don't qualify as a bonafide resident.
2. To qualify under physical presence, I should have been in India for atleast 330 days.
3. If I don't qualify for FEI, I need to take a tax credit for tax paid on gross salary in India from Mar 2009-Dec 2009.

Appreciate if someonce can answer the above.

Thanks.

Ravi999 · Post by **Ravi999** » Sun May 09, 2010 3:01 am

I am not going to provide a solution but my question is, if you don't quality for FEI, then you are double taxed, right? This is with reference to your indication of tax credit for the period Mar 09 to Dec 09.

Desi · Post by **Desi** » Sun May 09, 2010 8:45 am

Please google PUB 54 and read pages 12 thru 16 for your case.

r2i_007 · Post by **r2i_007** » Fri May 14, 2010 11:56 am

"I am not going to provide a solution but my question is, if you don't quality for FEI, then you are double taxed, right? This is with reference to your indication of tax credit for the period Mar 09 to Dec 09. "

If you don't qualify for FEI, then you are not double taxed. You can take the foreign tax credit.

r2maa · Post by **r2maa** » Tue Jun 01, 2010 3:26 pm

Blues;266286Hi all,
I lived in US till apr 2009 and lived in India for the remainder of 2009. I need to file tax as resident alien due to the 183 day rule. I don't have GC and was on H1. I need to disclose my world income since I will have to file as resident.

The IRS guidelines on foreign earned income credit requires that I should have stayed 330 days in India to satisfy the physical presence requirement.But I did not live 330 days in India in 2009.

Please advise me if I can claim the foreign earned income credit. Also if I don't disclose my Indian income will it create any issues in future.

Thank you

The 330 days is a long topic. See examples in
http://www.irs.gov/publications/p54/ch04.html
In essence, in a 12-month window of your choice (can span tax year and its next year, etc.), if you stayed outside US for 330 days, then Foreign Earned Income Exclusion could be considered for the fraction of the tax year which overlaps with those 12 months.
In your case, an outline could be that you would complete 330 days sometime in March 2010; 12 month window could be chosen as March 2009 to March 2010 so that you could take Mar 2009 to Dec 2009 as the fraction of the year for which you could apply FEI , i.e, for (#days/365)*MaxFEI is the max exclusion for you for that tax year. You need to consider exact # days, whether you made any US trips within the 330 days I mentioned (in which case 330 days would end later), etc.
This is my understanding anyway.
Also read
http://www.r2iclubforums.com/forums/showthread.php/9550-US-tax-questions-specific-for-Tax-year-2008-filing?p=209175#post209175

Report all your income and pay tax... price for your peace. Donate some amount out of your pocket in addition, and you will start to feel good even.