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Tax Law (Questions About Taxes)/US Citizen teaching abroad


A friend's daughter went to Italy in July of 2012 to teach for a couple of years.  Her foreign school employer issued her a 2012 w-2 for her wages but did not withhold any federal or state income tax....they did withhold SS and medicare taxes...  Does she have to pay federal and state income taxes on these wages?  How will the foreign earned income credit affect her 2012 income tax returns?  How will her 2013 income tax returns be affected?

Thanks in advance for any help you could provide!

Dear Mike,

Your friend's daughter has to file U.S. tax return as if she had lived in the U.S. and report her worldwide (foreign and U.S.) income (see

Most probably she will not owe any tax - however, annual reporting requirement is required in order to stay in compliance with the IRS and preserve the right for the foreign earned income exclusion.

Hope this helps,


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IJ Zemelman, EA MBA


I am an IRS-authorized EA and principal of a Tax Preparation firm focusing on U.S. Expatriates. We specialize in all tax issues faced by American citizens living abroad - such as foreign earned income, tax treaties, foreign spouse, etc. Visit our website - - for more information.


18 years professional tax experience, 12 with expatriate taxes.

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MBA from Zicklin School Of Business, IRS Enrolled Agent

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