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Originally Posted by Dostoevsky
Gar, thank you so much for taking all this time out of your schedule to help us out.
I am playing professional basketball in Croatia. I will make the equivalent of about $40k in salary over the next 9 months. The club I play for covers my Croatian taxes, apartment rent, car costs, insurance, food, etc. I just put the money in the bank.
(1) Do I have to pay US taxes on my salary?
(2) If not, do I even have to file any forms?
(3) Should I leave my money in a Croatian account or can I put it in my American account?
Thank you so much for your help.
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1) Foreign earned income is reported on Form 2555 or Form 2555 EZ. Qualified individuals may exclude up to $80,000 of foreign earned income (example: salary or wages, housing allowances) from taxable income. Foreign taxes paid on excluded income do not qualify for the foreign tax credit.
To qualify, you must be a resident for an uninterrupted period that includes an entire tax year (jan 1 - Dec 31,) OR you must be physically present in a foreign country 330 full days during a period of 12 consecutive months. If you are not present for the amounts listed in the above criteria, the amount of the foreign earned income exclusion is adjusted pro-rata.
2) See above.
3) If the Croatian account is relatively secure and guaranteed by something, than sure. Leave it. If not, move it to a US account if not too much of a hassle, since they have FDIC insurance in most cases, which covers up to $100k from loss.