Tax Refund Overseas

Question: Do overseas military contractors need to pay taxes if overseas over 330 days?

I took on a military contract overseas for a company based out of Texas. I lived on the German economy (paid rent, paid utilities, etc) I even bought a car (through the military car sales program) but I did pay taxes on it once I imported it. As far as living expenses went, I was paid Per Diem. I was told by some of the guys I worked with we wouldn’t have to pay taxes. At all. for a short period I paid taxes but stopped. One tax firm says I’m getting a large amount refunded while another says I owe a larger amount. what are the rules on working overseas as a military contractor?

Answer: Yes! You qualify for the Foreign Earned Income and Housing: Exclusion – Deduction in publication 54. As long as you meet the following requirements:

Your tax home must be in a foreign country.

You must have foreign earned income.

You must be either:

A U.S. citizen who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year,

A U.S. resident alien who is a citizen or national of a country with which the United States has an income tax treaty in effect and who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year, or

A U.S. citizen or a U.S. resident alien who is physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months.

See Publication 519 to find out if you are a U.S. resident alien for tax purposes and whether you keep that alien status when you temporarily work abroad.

If you are a nonresident alien married to a U.S. citizen or resident alien, and both you and your spouse choose to treat you as a resident alien, you are a resident alien for tax purposes. For information on making the choice, see the discussion in chapter 1 under Nonresident Alien Spouse Treated as a Resident.

Waiver of minimum time requirements. The minimum time requirements for bona fide residence and physical presence can be waived if you must leave a foreign country because of war, civil unrest, or similar adverse conditions in that country. This is fully explained under Waiver of Time Requirements, later.

You will need to fill out form 1040 and attach form 2555. Instructions are on the form.
check the link below for more information.

China Introduces Overseas Tourists Tax Refund,

China’s Ministry of Finance has disclosed that foreign visitors to Hainan will benefit from a tax refund on goods purchased on the island, with effect from January 1, 2011.

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