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2555-EZ Form: What You Should Know

For a detailed and up-to-date explanation about the IRS's procedures for Collection Due Process hearings, see: What Is a Collection Due Process Hearing? — Solo The purpose of the collection process is to recover delinquent taxes or penalties, and to compensate the Internal Revenue Service for the costs of collection. The Internal Revenue Service (IRS) has several types of collections proceedings in addition to those described above. The following are described as: IRS Form 8300 and Internal Revenue Manual (IRM) 76-2950, Collection Due Process; IRM 76-2950, Application for an Order for Collection; IRM 76-2960, Collection Due Process Hearing; IRM 76-2965, Settlement and Refund Proceedings; IRM 76-2970, Notice of Collection Final Decision The IRS uses these collection processes as a means to pursue delinquent tax debt, recover the unpaid tax debt, and compensate the IRS for the costs of collection. What Is a Collection Due Process Hearing The purpose of a collection proceeding is to establish whether the return or payment is timely filed or that the tax was properly assessed. If no timely filed return or payment is established, the return or payment is deemed an overpayment and the taxpayer is issued a notice of deficiency. If the notice is not appealed, the taxpayer is treated as if he or she is being assessed any unpaid tax due. When the IRS collects taxes through a collection proceeding, collection tax assessments are made by the Office of Undersecretary for Enforcement (OWE). Each determination of a collection is based upon the facts and circumstances under which the taxpayer or his or her agent acted. The assessment of tax, interest, and penalties is made by an independent federal tax assessment court (IRMA) for certain types of cases when the Department of the Treasury (Treasury) determines that any collection, including interest, under IRC §6021 is warranted by the evidence. The determination by the IRS of whether to appeal each determination of a collection, or whether to collect a tax under IRC §6021 is made by the Office of Undersecretary for Enforcement (OWE). To determine whether a particular determination or decision makes the taxpayer liable for an overpayment or collection tax, the determination should be reviewed and, if appropriate, appealed. The determination can also be appealed based upon other factors, such as the application of law or the extent to which other collection procedures are followed.

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Video instructions and help with filling out and completing Form 2555-EZ

Instructions and Help about Form 2555-EZ

Music this video discusses form 2555 and the foreign earned income exclusion first we will briefly go over the requirements to claim the exclusion and then we will review the form line by line to simplify the video we will not be going over the housing deduction which is generally applicable to self-employed individuals if you are a US citizen or a u.s. resident alien living in a foreign country you are subject to the same US income tax laws that apply to citizens and residents living in the United States however if you meet certain requirements you may be able to exclude up to a hundred and two thousand one hundred dollars of foreign earned income for 2023 you qualify for the foreign earned income exclusion if you have foreign earned income you meet the tax home test and you meet either the bona fide residence test or the physical presence test foreign earned income generally means income you earn from services you performed in a foreign country where the employer is located and where the payment is made are not relevant to determine if the income is foreign income the term foreign country does not include u.s. possessions US territories Antarctica or international waters you must actually be in a foreign country or in the country's territorial waters or airspace earn income does not include income from pensions or annuities income is an employee of the United States government or certain deferred payments such as income that is received after the year after the services were performed for example if services are performed in 2023 and payment is received in 2023 the payment received in 2023 cannot qualify for the exclusion these deferred payments sometimes occur with the payments of bonuses so we just discussed the first requirement...

FAQ - Form 2555-EZ

What does the IRS mean by Line 13 of Form 2555-EZ? Does "Maximum foreign earned income exclusion" refer to the maximum allowed by law? If so, shouldn't they already know that?
They do know the number and is already filled in. You need that number lower down in the form. See line 16. They could provide the number in some other way, such as in the text at line 16, but this is the IRS’s writing style.
Where can I find information on paying my U.S. taxes to the IRS if I am a dual passport citizen who resides permanently outside of America?
The nearest US embassy or consulate. Generally, you should not have to pay any US taxes if your country of residence has higher tax rates than you would pay in the US. The amount of foreign taxes above the US amount can be declared as a carry forward deduction. That would come into play if you moved back to the US. I forget how many years you can carry forward but it is several.If the country of residence has lower taxes, you may be liable for some taxes, but under the IRS rules, when you live abroad for a soecific amount of time, you can exempt a sizeable amount of income from US taxation.The US Consulate should have all the forms and instructions you need.
Can I hire my spouse to double my FEIE? I have a limit of about 100k for the FEIE. Say I make $175k, can I pay my spouse $75k so that we each use our exemption? If so, can I just pay her as a contractor? How sketchy would this be?
You really ought to discuss this with an experienced tax accountant. If it is legally allowed, then it is not sketchy, right?“If both you and your spouse work abroad and each of you individually meet the requirements, you can each choose the foreign earned income exclusion, the foreign housing exclusion, and/or the foreign housing deduction. You and your spouse would then file separate Forms 2555 or 2555-EZ. Depending on the circumstances, a couple could end up filing one or two forms. There may be situations in which one spouse files a Form 2555 and the other files a 2555-EZ.”This is a quote from the FEIE instructions. Here is the link:Foreign Earned Income ExclusionGood luck! And don't forget to call that accountant!
I’ve received an offer for USD 90,000 PA for a position in Seoul. We are a family of two. Is this is a good salary considering further income tax cuts? Also, how much will I get taxed?
The foreign earned income exclusion is available only for income earned for services performed in a foreign country, and is claimed on IRS Form 2555 or 2555-EZ. The maximum foreign earned income exclusion is indexed annually for inflation; for 2023. it was $100,800 per person. However, the Personal Income Tax Rate in South Korea stands at 40 percent. If you can land a US job, you may be better off tax wise.
Will the executive order about illegal immigrants make anyone eligible for the earned income tax credit who is not now eligible?
Here are the rules for who can claim the Earned Income Tax Credit:To qualify for Earned Income Tax Credit or EITC, you, and your spouse if married and filing a joint return, must meet all of the following rules:Have a Social Security Number that is valid for employmentHave earned income from working for someone, running or owning a business or farm or another sourceCannot file as married filing separate Must be: a U.S. citizen or resident alien all year or a nonresident alien married to a U.S. citizen or resident alien, file a joint return and choose to be treated as a resident alien (for more information on making this choice, see Publication 519, U.S. Tax Guide for Aliens)Cannot be the qualifying child of another personCannot file Form 2555 or 2555-EZ (related to foreign earned income)Your Adjusted Gross Income and earned income must meet the limits shown on the Income Limits, Maximum Credit Amounts and Tax Law Updates PageYour investment income must meet or be less than the amount listed on the Income Limits, Maximum Credit Amounts and Tax Law Updates PageThe text can be found here:Earned Income Tax Credit Rules for EveryoneConclusion:  Since the people covered by the Executive Order will not be US Citizens or Resident Aliens, then they will not qualify for the EITC.
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