Dual Citizenship & Taxes ( Saudi Arabia & American US

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QUESTION:
I have dual citizenship (American by birth) and (Saudi Arabian because of my
parents). I am going to the US in May 2004. By that time, I have already
worked 4 months in Saudi Arabia as a Saudi Citizen and already made USD
8960.
There are no taxes in Saudi Arabia.
Do I have to file taxes in the states when I get there.
FYI, I just started working last Jan 2004.
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david ingram replies:
An American or US citizen must file a US tax return no matter where they work and no matter where the money is paid from.
However, they can exempt up to $80,000 ($82,000) in earnings when they have been away for 330 days out of 365 or have lived as a resident in the other country for a full calendar year.  In your case, you could file your 1040 return and exempt the Saudi money on form 2555. (we do this "all" the time for people in Saudi Arabia, Kuwait, Dubai, Quatr, etc.)  
You can use your full year in 2003 to qualify for the exemption of the money in 2004.  The exemption does not apply to dividends, interest, rents or capital gains.  Therefore, interest or dividends or interest are taxable in the US even if there is no tax in Saudi Arabia.
David Ingram's US/Canada Services
US/Canada/Mexico Tax Immigration & working Visa Specialists
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