NAS/NJME Tax Issues
Thread Starter
Joined: Nov 2003
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From: USA
NAS/NJME Tax Issues
I understand that the Kingdom does not tax the income of expat NAS pilots. Are there any US pilots that work the NJME 35/31 schedule out there that can shed light on how the IRS treats this income? I.E. The Physical Presence (330 Days) Test is obviously out, but is there a legitimate Bona Fide Resident claim? Thanks.
Cheers,
C17
Cheers,
C17
Joined: Nov 2001
Aviation Qualifications: SLF
Posts: 541
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From: Not sure now
Only if you get a resident visa in your passport or some other form of proof that you have residency in the Kingdom. Still it would be hard to beat an audit if you spend 6 months of the year in the States.
OTOH, you could spend the days off in a country other than the USA and still meet the 330 day requirement.
TP
OTOH, you could spend the days off in a country other than the USA and still meet the 330 day requirement.
TP
Thread Starter
Joined: Nov 2003
Posts: 6
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From: USA
TP,
Unfortunately, I think the IRS excludes the time spent out of the country in which one is claiming the 330 days. I've looked at the physical presence test from a lot of different angles and have pretty much eliminated its feasibilty.
Hopefully, the bona fide resident angle will work out as it does not prohibit maintaining a residence in the US or visits back here. With the NAS/NJME contract there is no 401K or retirement plan, so if taxes come into play, that's some pretty hefty tax exposure with no way to control it. Plus, no social security credit.
Other countries seem to have much more favorable rules with regard to foreign income tax exclusion.
Cheers.
Unfortunately, I think the IRS excludes the time spent out of the country in which one is claiming the 330 days. I've looked at the physical presence test from a lot of different angles and have pretty much eliminated its feasibilty.
Hopefully, the bona fide resident angle will work out as it does not prohibit maintaining a residence in the US or visits back here. With the NAS/NJME contract there is no 401K or retirement plan, so if taxes come into play, that's some pretty hefty tax exposure with no way to control it. Plus, no social security credit.
Other countries seem to have much more favorable rules with regard to foreign income tax exclusion.
Cheers.
Joined: Jun 2002
Posts: 68
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From: Paris
Mr. Typhoon pilot,
How are you?...If a guy goes to work for NJME for example, stays out of the US for 6 months and a day, and takes up residence in, say,...the Bahamas or something to that effect, should his salary be legally free and clear of US taxation?
If not, why not, and what would the purpose of living in a tax-haven serve in your salary was subject taxation?
This part I don't understand just yet.
Thanks in advance,
A
How are you?...If a guy goes to work for NJME for example, stays out of the US for 6 months and a day, and takes up residence in, say,...the Bahamas or something to that effect, should his salary be legally free and clear of US taxation?
If not, why not, and what would the purpose of living in a tax-haven serve in your salary was subject taxation?
This part I don't understand just yet.
Thanks in advance,
A
Joined: Nov 2001
Aviation Qualifications: SLF
Posts: 541
Likes: 0
From: Not sure now
First of all, I'm not a qualified tax attorney, but I did stay at a Holiday Inn Express last night.
Not true, this is from the IRS website:
A U.S. citizen or a U.S. resident alien who is physically present in a foreign countryor countries for at least 330 full days during any period of 12 consecutive months.
So true, I always correct people when they talk about the U.S. as being the land of the free. It's only free as long as you don't try to leave 
As long as he stays in another foreign country for 330 days out of 365 I don't see why not. Mind you, there is a limit on the amount but I doubt 6 months pay at NJME would exceed the limit.
Read this:
http://www.irs.gov/faqs/faq13-3.html and remember only your Foreign Earned Income is excluded from taxation. Tax havens are not for Americans, they are for other people. If you knew to what lengths the IRS, FCEN, and others go to track U.S. citizens and their money you wouldn't sleep very well at night if you were trying to cheat them.
TP
Unfortunately, I think the IRS excludes the time spent out of the country in which one is claiming the 330 days.
A U.S. citizen or a U.S. resident alien who is physically present in a foreign countryor countries for at least 330 full days during any period of 12 consecutive months.
Other countries seem to have much more favorable rules with regard to foreign income tax exclusion.
If a guy goes to work for NJME for example, stays out of the US for 6 months and a day, and takes up residence in, say,...the Bahamas or something to that effect, should his salary be legally free and clear of US taxation?
If not, why not, and what would the purpose of living in a tax-haven serve in your salary was subject taxation?
http://www.irs.gov/faqs/faq13-3.html and remember only your Foreign Earned Income is excluded from taxation. Tax havens are not for Americans, they are for other people. If you knew to what lengths the IRS, FCEN, and others go to track U.S. citizens and their money you wouldn't sleep very well at night if you were trying to cheat them.
TP
