IRS Consequences In The UAE

[spudster]

New to UAE, B-737. Any Yanks have the answer for the IRS ramifications
living / working in tax free UAE? No luck with thread search.

[BA2008]

What do you need to know?

UAE is tax free country, however as US citizen you must declare your income world-wide. You'll have a foreign earned income exclusion of $ 87k or so plus housing exclusion if eligible, check IRS pub. 54 and try to fill out form 2555 as an exercise first and see if you may qualify under one of the 2 tests on that form.

Good luck,

[boiler]

If you have lived and worked outside the US for a year, your first $85,700 is tax free (it usually increases a bit every year). You need to fill out the Foreign Earned Income Exclusion form (#2555) and then deduct that amount in your 1040 form.

[BobDole]

Foreign Earned Income Exclusion - IRS Form 2555


They explain it pretty well here...

[411A]

Section 911 of the Internal Revenue Code covers...and is explained in IRS Publication 54...have a look on line.

Make no mistake, you must file, whether you owe tax or not on the excluded income on form 2555.
They (the IRS) will find you if you don't...

Also, find a good CPA who is familiar with the tax code.

[PositiveRate876]

You must also spend at least 330 days outside of the US in any given tax year.

[boiler]

There is another form that you have to fill (can't recall the number) in which you have to declare any bank account that you have that is outside the US. This form has to be sent to the department of justice I think and not to the IRS.

[Laker]

I don't think you have to spend 330 days outside of the US. If you can claim that your primary residence is in Dubai/AUH/etc then I believe you qualify for the exemption. I could be wrong though....

[TonyWilliams]

To claim residency (and not use the 330 day rule) would require (to pass an audit) a resident visa in the country, and not a work visa.

[Laker]

Tony,

I believe Etihad gives all of their pilots permanent resident visas. Obviously you cannot commute so all their pilots are residents of Abu Dhabi...

[Panther 88]

To qualify for the permanent resident exemption, you need to be a legal resident of said country for one whole tax year Jan-Dec. Just being a resident does not qualify you if it is not one entire tax year of residency. Otherwise it is the 330 day exemption. Now this part can get iffy-if you don't qualify for either this year, perhaps you qualify for the State Department's default perdiem for the amount of time you are out of the US.