Another tax question - "tax home" and domicile requirements

[lemayz 2]

Hi everybody,

I am starting to get everything in order for the AOS (I am applying from abroad for a CR1 for my foreign husband), but I have come to a little problem:

I have been filing taxes in the US my whole life, including the last 5 years, during which I have been in Chile. While I have been in Chile, I have done some part time consulting work for US companies, so I have been filing taxes as self employed.

Throughout this time, I have also been working in Chile, where I have filed my taxes locally. I knew that in the US, the foreign earned income exclusion applied to me, since I earned much less here in Chile than the threshold of $92,500. However, I didn't realize that I had to file the 2555 Foreign Earned Income in order to have the exlusion. Now I think I will try to do an ammendment to my previous taxes with the 2555.

However, my issue is the following: in order to quality for the Exclusion, according to this document: http://www.irs.gov/pub/irs-pdf/p54.pdf , my tax home must be in a foreign country. I have read the description of a tax home, but am still confused. If I still filed in the US and had some income in the US...can I have two tax homes...one there and one here? And more importantly, if I say that my tax home is HERE in Chile, can I still try to prove that my DOMICILE (for the AOS) is in the US? Or are those two options mutually exclusive?

The PDF says that "Having a “tax home” in a given location does not necessarily mean that the given location is your residence or domicile for tax purposes" so I am assuming this means that I can keep my domicile in the US even thought my tax home is in Chile?

Any suggestions on what to do in this case? Has anyone gone through anything similar?

Oh, and by the way, I am trying to prove domicile for the AOS rather than reestablish.

Thanks so much!

Leana

[sctdixon 6]

I'm in a similar situation to you. I am a USC that lives & works in Peru. This is my "tax home", so to speak. I am a residente here and pay Peruvian income taxes.

When I file my US income taxes, I also am required to submit Form 2555. I meet the "Bona Fide Residence Test or Physical Presense Test", do you meet those requirements?

Edited February 21, 2012 by sctdixon

[lemayz 2]

Thanks for responding! Yes, I definitely meet the Bona Fide Residence test. So you don't have any problems with the tax home issue? Do you also make money in the US or only in Peru?

Thanks

[sctdixon 6]

Thanks for responding! Yes, I definitely meet the Bona Fide Residence test. So you don't have any problems with the tax home issue? Do you also make money in the US or only in Peru?

Thanks

My income is only from Peru and have not had any tax problems or issues. Are you using an expat tax specialist in the states? I do and can recommend them if you need such a service.