Foreign Earned Income

junkax13 · Post by **junkax13** » Fri Apr 11, 2014 6:47 pm

I lived and worked in Canada for the first few days in January (I was living and working there since 2010) - January 3rd to be precise. I lived and worked in US since january 4th. I earned some money in wages during my stay in Canada. I know I need to report my income in all foreign countries for US federal taxes. I am wondering if I qualify for the Foreign Earned Income exclusion - based on either the bona fide or physical presence test.

Instead of using the foreign income exclusion, if I use tax credit for the tax I would pay in Canada, the amount of credit I get is much lower than the US federal tax I pay on Canadian income.

I am neither a citizen of US or Canada. I am an Indian citizen.

Please advise.

nelsona · Post by **nelsona** » Sat Apr 12, 2014 8:04 am

Yes you can use the FEIE, but you will get only 3/365ths of the 98K limit, so only 1K of exemption. The rest will have to be 1116.

Since you have no doubt prepared your Cdn departure return, what amount of income and what tax have ou come up with on that return?

1116 is design to NOT give you full credit

junkax13 · Post by **junkax13** » Sat Apr 12, 2014 1:36 pm

If I count 330 days back from 04 Jan and 12 months forward from there, it will be Feb 7 2013. So that's 38 days in 2013. That's 11% of income (11% of 7.6k) that can be excluded. In that case, how much tax credit can I claim?

The Canadian taxes for 7.6 k, using 3k of RRSP towards deductions is around 350$. I am reporting that I have US income for the rest if 2013. So I don't get the full deduction.

Almost all of that 7.6k is earned in 2012(but receivef in 2013). Also, quite a bit of it is for unused 2012 vacation. Can I claim it against 2012 FEI cap? Or can I not include the Canadian income because it is mostly for work done in 2012?

Given the above situation, please advise what the best way to deal with Canadian income.

Thanks a lot for your help. Really appreciate it.

nelsona · Post by **nelsona** » Sat Apr 12, 2014 9:11 pm

I think you can figure it out.

junkax13 · Post by **junkax13** » Mon Apr 14, 2014 4:14 pm

Can the canadian income received in 2013, but earned in2012, be excluded from being considered for2013 federal and state taxes?