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June 4, 2019
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Dual citizen living abroad for 8 years. Have not been back to the U.S. since. Only started working abroad 1.5 years ago. Do I qualify as a bonafide resident?

  • June 4, 2019
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Best answer by GeoffreyG

The answer to your specific question is yes; if you've been living abroad for (8) years and have not been back to the United States in all that time, you most certainly would qualify for the Bona Fide Residence Test.  (You also pass the Physical Presence Test as well.)

Please see the instructions for IRS Form 2555, Pages 2 and 3, here for more details on both tests:

https://www.irs.gov/pub/irs-pdf/i2555.pdf


The rest of the Form 2555 instructions explain the Foreign Earned Income Exclusion benefits.

That said, assuming that you likely have a bank account or maintain other financial assets abroad, there are certain foreign financial account reporting requirements that you must also meet annually (and these requirements also apply to dual citizens), in addition to filing a primary tax return (Form 1040, etc.).

In fact, there are two separate disclosure forms that may be required; each also has different reporting rules.  One is known as IRS Form 8938, and can be attached to the relevant yearly Form 1040 tax return.  The other is FinCen Form 114, which can only be filed via the internet.  The following Internal Revenue Service webpage describes them in some detail, and provides their dollar value reporting levels:

https://www.irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements

 

Form 8938 is included in TurboTax; FinCen Form 114 is not, and you would need to access that reporting webpage separately, if your foreign financial assets total over the limit(s).  Note that you can get to the FinCen reporting internet site through the above IRS link.

Even if you do not have to file either of those disclosure forms, due to your account balances, you should at least be aware of the rules (and now you are).

Thank you for asking this question, and for posting on the AnswerXchange.

1 reply

GeoffreyGAnswer
Employee
June 4, 2019

The answer to your specific question is yes; if you've been living abroad for (8) years and have not been back to the United States in all that time, you most certainly would qualify for the Bona Fide Residence Test.  (You also pass the Physical Presence Test as well.)

Please see the instructions for IRS Form 2555, Pages 2 and 3, here for more details on both tests:

https://www.irs.gov/pub/irs-pdf/i2555.pdf


The rest of the Form 2555 instructions explain the Foreign Earned Income Exclusion benefits.

That said, assuming that you likely have a bank account or maintain other financial assets abroad, there are certain foreign financial account reporting requirements that you must also meet annually (and these requirements also apply to dual citizens), in addition to filing a primary tax return (Form 1040, etc.).

In fact, there are two separate disclosure forms that may be required; each also has different reporting rules.  One is known as IRS Form 8938, and can be attached to the relevant yearly Form 1040 tax return.  The other is FinCen Form 114, which can only be filed via the internet.  The following Internal Revenue Service webpage describes them in some detail, and provides their dollar value reporting levels:

https://www.irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements

 

Form 8938 is included in TurboTax; FinCen Form 114 is not, and you would need to access that reporting webpage separately, if your foreign financial assets total over the limit(s).  Note that you can get to the FinCen reporting internet site through the above IRS link.

Even if you do not have to file either of those disclosure forms, due to your account balances, you should at least be aware of the rules (and now you are).

Thank you for asking this question, and for posting on the AnswerXchange.
June 4, 2019
Thank you for your well informed reply. I have read up on the links you shared. However, I am still unclear about the following: I have only been working abroad for 1.5 years now. Does that play a role as far as time goes, i.e. my "Tax Home."?

I have been living in the same foreign country (of which I am also a citizen) for the last 8 years and have not been back to the U.S. once in that time, nor do I have U.S. based income or a U.S. residence/home, abode, etc.

I have paid taxes here for the last 8 years in the form of "kest" on my foreign bank account interest. However, as mentioned above, I only started working and paying "wage-based" taxes here 1.5 years ago.

Based on these facts can I safely assume I pass the bona fide residence test for the purpose of filing the Foreign Earned Income Exclusion?

Many thanks for your time and guidance!