February 16, 2012

U.S. Citizens Taxed on World-Wide Income

My 22 year-old son is a missionary in north Africa. He received a W-2 for his 2011 compensation. Is it taxable in the U.S.?

Yes, all U.S. citizens are taxed on their world-wide income. A substantial exclusion may be available to him by filing Form 2555 or Form 2555-EZ for the Foreign Earned Income Exclusion. Also, don't forget State income tax filing.

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