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There is much confusion about what constitutes foreign earned income with respect to the residency location, the location where the work or service is performed, and the source of the salary or fee pay out. Foreign residency or extended periods abroad among the tax payer is really a qualification to avoid double taxation. What everyone knows as your ‘income’ tax has 2 tax brackets each featuring a own tax rate from 10% to 35% (2009).

These rates are placed on your taxable income which is income more your ‘tax free’ a living. cibai Example: Mary, an American citizen, is single and lives in Bermuda. She earns an income of $450,000. Part of Mary’s income will be subject to U.S. tax at the 39.6% tax rate. If you truly sign on the company account, even if you’re a minority shareholder, then there is more than $10,000 to their rear and do not need to report it to the U.S., additionally a felony and is prima facie memek.

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