Almost Done! Tonight Quiz Review Section 4 Break Review Section 14 Questions and Concerns

Payroll for U.S. Employees Working Abroad and Aliens in the United States Section 14

Overview Type of Employees Taxation Issues Exclusions Visas

Types of Employees Expatriate – US Citizen or Resident Alien Working Abroad Non Resident Alien – International working in US with Visa Resident Alien – Substantial Presence Test (next slide)

Substantial Presence Test You will be considered a U.S. resident for tax purposes if you meet the substantial presence test for the calendar year. To meet this test, you must be physically present in the United States on at least: 31 days during the current year, and 183 days during the 3-year period that includes the current year and the 2 years immediately before that, counting: – All the days you were present in the current year, and – 1/3 of the days you were present in the first year before the current year, and – 1/6 of the days you were present in the second year before the current year.

Taxation Issues What is subject to Federal Income Tax Withholding (FITW)? What is subject to Social Security and Medicare? Who is covered by FUTA? Tax equalization plans Tax protection plans ITINs

What are these? Foreign Country Full Day Totalization Agreements Temporary Assignment Foreign Affiliate Foreign Employers & US Gov’t Contracts Foreign Earned Income US Income Tax Treaties

Where does the Employee live? Tax Home Domicile Bona Fide Residence Test Physical Presence Test

Exclusions Foreign Earned Income Exclusion – 2012 – International Airspace is not considered a “foreign country” it would be taxed as if earned in U.S. Limit 2012 $95,100 Foreign Housing Cost Exclusion – Form 673 (appendix page A-139) Max Foreign Earned IncomeHousing Cost Exclusion Base Housing Maximum Foreign Housing Exclusion Limitation AmountCost Exclusion , $29, $15, $13,888

Forms to Know Form 673 Form 2032 Form 2555 Form 1116 I – 9 Form 6166 Form 8802 W – 4 W – 9 W – 7 W – 8BEN

Types of Visas B – 1 D – 1 E – 1 E – 2 F – 1 H – 1B & H – 1C J - 1 L – 1A & L – 1B M – 1 O – 1 & O – 2 P – 1 Q R – 1 TN, NAFTA

Questions ?

Final Week 9/04/ Question Post Test Final Wrap Up And PIZZA!