It needs to determine the ‘physical prescenece test’ to determine your tax home. But either way you have to report the US income of course. The US embassy even has tax help, try there also but I do not know the name of the guy, but rather it was at Boze Cialo in Krakow.

Thanks for your response. As I mentioned earlier, I have a relatively simple situation (the complexity comes only from having spent some portion of 2011 in each country and earning income in both countries only during each respective portion of time, as an employee, no ownership of any business or other income-generating entities). Can you tell me the name of the gentlemen at your church (do you have his name, phone, email & website (if he’s got one)?

On the U.S. side, I’d like to use Taxact (Turbotax competitor) if possible. I’m trying to keep this as straightforward as possible.

I’m not looking to shield taxes or play games, I just want to properly file in both countries.

If you can reply via my email, I would appreciate a call if you have some free time. I can send you my number via email.

Regards,
M

This is an important point and I really should do a full post on this. But basically all US citizens need to report all income worldwide. For example, many people own foreign real estate from the boom and while the are waiting for it to come down they rent it. Yet for some reason they neglect to report this on the schedule E. This is a huge problem, as it is unreported income to the IRS.

You are very wise to do both US and Polish taxes, I always did and still do.

I recommend that you find a local Polish guy to do Polish taxes and someone to help you with US taxes. I am sure there are people who do both but I do not know any besides the big companies. Technically, I am a professional tax preparer but not doing them now as I have too much work on my plate.

If you are looking a way to shield taxes in an honest way, I can tell you with my experience those door have all been closed. I can not think of a creative way get around taxes that are honest and legal. I am not just saying that because I am on some high house. But really, you have to report income and based on your business and life situation there are some legal deductions and exclusions you can take.

The biggest problem is if you have a family abroad and do not make a lot of money you can not take the earned income tax credit.

Can you use Turbo Tax? What kind of things do you have? Let me guide you a bit or suggest who you can go to.

In Poland we went to the church and they had a professional who did it for free, you can also make a donation. I felt the did an excellent job. If you have a more complex situation like a business, I think the same guy would do it at a very reasonable rate. It all depends on your situation. If you could explain it a little more I could give you some ideas.

Basically all income no matter what has to be reported to the US government. Then any deductions and exclusions are based on US tax law, they do not care about Polish tax law, although there are some foreign allowance depending on the physical presences test etc.

In your time in Poland, have you met any Polish-based accountants that can help prepare both a U.S. as well as Polish tax returns? THis is what I am looking for, someone experienced enough to file (relatively simple) returns in both countries in a smart way.

Please let me know, either way (whether you do or do not know an accountant like this). You mentioned that you used to prepare taxes at Ernst & Young, do you still?

Many thanks in advance!
M

Lets say fixed cost for a nice life is 1600 pln.
Then food you can shop at Alma or Auchen. Alma is an international whole food shop and Auchen is like a Walmat.
You can also shop at the local farmers markets. Food cost depends on how much you like French cheese or Polish Apples.
But lets say for a single guy, you spend 1400 pln on food and other expenses, nice clothes and good food. That leaves you with 5000 pln a month on disposable income or 3000 pln if you spend more. You can save it, take vacations or spend your time at the pub. It is about 1000 – 2000 dollars a month pure cream depending on the FX rate etc. Maybe I am optimistic but it depends what your spending patterns are now. I walk or from time to time go to the pool and love reading and movies so my expense are not too high. I do eat different homemade meals everyday from Sushi to Pizza. In my book you will be making more than most Poles ever will.