New Member - Tax Question

[wefisher]

I live In Bayawan City Negros Oriental  Philippines. I love gardening and raising pigs and Chickens.

 

I have a question that I am having a hard time getting a answer.

 

My Home of residence was in the state of Illinois. I no longer live there or have any contact there  I  moved to Bayawan City almost two years ago.  My Daughter lives in Dyer Indiana.  I get some of my mail there. 

 

Living overseas I required to clim a state?  I believe I am required to pay Federal taxes.

 

Thanks

 

Bill

[MikeB]

Welcome to the forum. I moved your post to a more appropriate category.

[scott h]

Welcome Bill. All I can do is tell you MY experience. I am retired military, old state of residence is California (the greediest state in the union lolol) Upon exiting the service I claimed no state as a state of residence the federal government DOES NOT with hold state income taxes from my pension. Further I still have my taxes prepared by my tax lady that I used prior to retirement. When she does our taxes she only files state income tax on a small amount that I receive from a small income property INSIDE California. So bottom line according to her only income earned in the state is taxable in that state. No problems so far. Again welcome to the forum.

[wefisher]

Thank you Scott

 

 Illinois was  my Home of record when I emerged the Navy. in 61.  I  do not have  any income form Illinois now.  So tomorrow I will check to the state to see what gives.

 

Thank you

 

Bill

[newbster]

I'm not qualified to advise you about taxes but I asked my tax advisor this question and he told me that just like if you moved out of Illinois to for example Maryland, if you move your primary residence out of a state and don't have income in that state then you don't need to pay taxes to that state. If you have income there then you need to pay state tax on that part of your income.

 

So if you don't have income in Illinois - my opinion is that you don't need to file in Illinois.

[JJReyes]

As part of our retirement planning, my wife and I changed our state residency from Hawaii (high taxes just like California) to South Dakota. Advantages include no state income tax, no state inheritance tax, and inexpensive vehicle insurance. We are full-time RVers. The only requirement is a P.O.Box at a local post office or a mail forwarding service. To establish residency, we needed to show a receipt from' a hotel or RV park that we stayed one night. We also registered our RV, got South Dakota drivers' licenses, opened an account with a local bank branch and registered to vote.  

 

The US federal government taxes your income on a worldwide basis. They do give credit for income earned in a foreign country. The maximum amount is something like $85,000. I haven't checked the latest figures.

Edited June 12, 2014 by JJReyes

[jon1]

The US federal government taxes your income on a worldwide basis. They do give credit for income earned in a foreign country. The maximum amount is something like $85,000. I haven't checked the latest figures.

 

 

JJ is referring to the Foreign Earned Income Exclusion which was $97600 for 2013 and $99200 for 2014. 

 

To qualify for the Foreign Earned Income Exclusion must be money earned OCONUS and you must be out of country 330 days per tax year. This can not be applied to CONUS generated income (Pensions, 401Ks, etc.).

 

Wefisher, I would establish a "tax" home in one of the States that does not have State Income Tax (FL, TX, NV, AK, SD, WA, WY) You will have to check with each state's requirements for the establishment of residence. 

[JJReyes]

JJ is referring to the Foreign Earned Income Exclusion which was $97600 for 2013 and $99200 for 2014. 

 

Thanks for the update on the amounts. I have not kept up since my wife and I reside in the United States.

[JJReyes]

Wefisher, I would establish a "tax" home in one of the States that does not have State Income Tax (FL, TX, NV, AK, SD, WA, WY) You will have to check with each state's requirements for the establishment of residence. 

 

If you are former military, states are exceptionally lenient on how to establish residency. I think the requirement is signing a one page. 

[GregZ]

If you have no presence nor income in any state you have no need to do anything.

 

If you have a presence or keep a valid USA driver license I recommend you get it from a state with no income tax.

 

Keep in mind that a presence in a state includes unearned income such as from bank deposit accounts.

 

I just got a Florida driver license and saw no information about a "one page" anything that JJ mentioned for prior/retired military.  I met their requirements with 2 pieces of mail.  One from a cell phone company and the other a bank.  I also registered to vote there.  I only did all this because at the time I am remaining inside the USA and previously I had bank accounts and a home in Georgia.  My vehicle registration was required to change to Florida within 10 days of getting the driving license and establishing residence there (just in case you were wondering).