Originally Posted by robertsapp
So just asking a question, as I don't know the answer - if you live on your boat and are cruising the world and therefore don't have a fixed foreign address, will the IRS accept the fact that you are not a permanent resident of the US?
Sorry for the long post... But if you are a US citizen and live overseas the following might be helpful.
If you don't already know about these, you should. Instructions for Form 2555 (2012)
and Publication 54 (2012), Tax Guide for U.S. Citizens and Resident Aliens Abroad
I've been doing this for years and yes, the IRS has established ways to prove you've been out-country. You need to be proactive on this. I've used form 2555 from 1983 through 2004 - it's not complicated. With the advent of the ACA (Obama Care) I'll recommence using the 2555 not because of income
exclusion but again to prove my being outside of the USA
Note: I've "income" from a US based retirement
source and as a US Cit needs must file with the IRS. I carry a Washington
state DL and a US passport.
Since retiring in 2004 I've used a different foreign address each year on form 1040. Sometimes a marina, sometimes a local pub/bar, sometimes a friend's home address - depends. I did not NEED to do this, but now with the ACA I'm glad I did - because I know that the IRS accepted my yearly tax paperwork using this method.
If unsure (ahem) of the reliability
with the local mail service
, I've enclosed the completed return in a sealed envelope with the local address on the tax forms and on the outside of the sealed envelope - then used DHL or FedEX to get the packet to a family member
in the States who takes the interior
envelope to a US post office, pays postage, and there it goes.
Note this: I've also attached a short memo to the 1040 stating that I'm travelling on my sailboat for an extended cruise
and if the IRS wishes to make contact to do so at the following ... and then provided my sister's address. If you use a Mail Forwarding Service
such as St. Brendan's Isle, you might make pre-contact and see if they will mail your stuff. (Maybe have to pre-pay them?? Ask.)
On Form 2555, here's what you're seeking: Part III, Physical Presence Test
"To meet this test, you must be a U.S. citizen or resident alien who is physically present in a foreign country, or countries, for at least 330 full days during any period of 12 months in a row. A full day means the 24-hour period that starts at midnight.
To figure 330 full days, add all separate periods you were present in a foreign country during the 12-month period shown on line 16. The 330 full days can be interrupted by periods when you are traveling over international waters or are otherwise not in a foreign country. See Pub. 54 for more information and examples."
Essentially, you'll list the start date for your travels, note that you're still outside the USA, and list all the countries you've been in / passed through.
IF you don't meet the 330 day requirement this time around you'll need to file without the exemption... BUT in the next year you'll use it, and you can also file a 1040X amended return for the prior year to get at least a few months of the exemption.
Note: Although I mention forms 1040 and 1040X, you might use other forms such as the EZ line but the same principle applies.
I'm still trying to get things to work with efile electronic filing. Last time around it wouldn't accept foreign zip codes. Go figure...
Also: Although Congress and/or the IRS might change things around between now and April 15th, what I've noted is applicable as of the now.
Good luck to all of us....