Monday, February 1, 2010

Foreign Service Tax Time Playlist

With the tax statements starting to roll in, its time to start thinking about (or thinking about procrastinating) the filing of 2009 income taxes.

Being in the foreign service complicates taxes, unless you were already a Virginia resident. When you join, you have to pick a "state of domicile" which is typically the place where you vote, hold licenses, own property, etc. Since we lived in DC prior, we kept DC as our domicile, which means we pay DC state taxes along with federal taxes while we are abroad. If Florida or Washington is your state of domicile, you are lucky to not have to pay state income taxes.

As we head to Oakwood and FSI this year and next, we have to consider our status in VA, but since we will be in the state for less that 183 days per year, we will still be non-residents and have to only file in DC for state taxes (hooray?).

Regardless, living overseas does have its tax benefit. You get an automatic two month extension from the IRS (if you owe money it is still due on April 15th). Now, you do not get an automatic extension from your state. And if your state income taxes are dependent on your federal taxes, you might as well just apply for an extension for them so that you can take that two extra months.

The American Foreign Service Association has a tax guide that is helpful, including a brief write-up on each state, if you are weighing which one to designate.

I would go into the complications of foreign earned income and whether hardship pay is taxed, but I believe it is time to talk about the fun part of taxes, creating your music playlist for while you are doing your taxes. Below was my playlist for last year. If you have any suggestions for this year's, please let me know!

Cash Machine, Hard-FI
Don't Stop Believin', Journey
Goody Two Shoes, Adam Ant
Got To Give It Up, Marvin Gaye
Help!, The Beatles
Help Me, Joni Mitchell
Here Today, Gone Tomorrow, Ramones
I Keep Forgettin', Michael McDonald
I Wanna Be Sedated, Ramones
I'll Feel a Whole Lot Better, Tom Petty
I'm Going Slightly Mad, Queen
I'm So Tired, The Beatles
I've Been Trying, Greyhound
If I Could Turn Back Time, Cher
If Things Were Perfect, Moby
Mercy Mercy Me, Marvin Gaye
Miracles, Mambo Sauce
Ob-La-Di, Ob-La-Da, The Beatles
One More Heartache, Marvin Gaye
One Thing Leads to Another, The Fixx
Please, Please, Please, Let Me Get What I Want, The Smiths
Policy of Truth, Depeche Mode
Save Up All Your Tears, Cher
A Season in Hell, Moby
Shout, Tears For Fears
The Show Must Go On, Queen
Taxes, Chris Rock
That's the Way of the World, Earth, Wind & Fire
What Difference Does It Make?, The Smiths
What's Going On, Marvin Gaye
Whatever It Takes, Anita Baker

Update: I ended up working in the Czech Republic in 2012: earning income, paying Czech taxes and reporting the foreign earned income on our U.S. income tax. For details, check out:
Paying Czech Income Taxes
Working as a Freelancer in the Czech Republic

Photo by Peter Carroll

4 comments:

e said...

kindof begs the obvious, "should 5% appear too small... be thankful I don't take it all" -taxman, beatles

Natalie Buda Smith said...

good one! A must add.

Ruth said...

"Going to the CPA"(The Tax Man) by Rob Hopman Hear it on You Tube

Gr'Ma

Manoj Mishra said...

Nice and very informative blog. Thanks for mention in details about foreign services tax time playlist.