U.S. Federal Taxes

Most of what you'll need to know about taxes, at least from the U.S. side, is tucked away in IRS Publication 54, ‘Tax Guide for U.S. Citizens and Resident Aliens Abroad' (resident aliens are green card holders).

It's only light reading to guys like Bill Bradley, but lays out the groundrules for being taxed by the U.S. Government while you live and work abroad.

You can also download the whole document, as well as every other document, form and publication the IRS has available.

Be sure to talk with an accountant or tax advisor before heading out to that new position in Cairo. Make arrangements to file while abroad; the most common money-related misconception among Americans abroad is that they do not need to file. While many Americans resident abroad do not have to pay much tax (by qualifying for the $80,000 a year foreign earned income exclusion as of 2006), this does not remove the obligation to file each year. In some cases, having failed to file while abroad, Americans returning home have faced significant penalties on income that would have been untaxed had they filed.

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