[ardnopes]

It's my first US tax season in New Zealand, and I have a couple of questions about the details, for somebody who's been through this:

Having arrived in late 2007, I don't qualify for the foreign income exemption when filing US taxes. Therefore, I'm taking the foreign tax credit (IRS form 1116). My questions relate to the amount of tax I can claim to have paid to New Zealand.

First off, I'm assuming that I have not technically paid my NZ taxes until the end of the NZ tax year (March 31 '08, after the end of the US tax year), so I can't check the 'taxes paid' box (h), and instead must go with 'taxes accrued' (box i). Is that true? I'd rather not check 'accrued' if I don't have to, as that obligates me to do so every year forever and ever.

Secondly, how much tax have I accrued for the purpose of the form? I see a few options:

The amount withheld by IRD
The amount based on my expected effective tax rate at the end of the NZ tax year (which should be about the same as the amount withheld)
Since my 2007 NZ income would fall entirely within the lowest tax bracket (19.5%), a flat 19.5% (the most conservative option)


Just to underline the seriousness of my question, I will now include a dancing banana:
:raebanana

Thanks,
Aron

[Moorf]

Just to underline the seriousness of my question, I will now include a dancing banana:

:laugh

Can't help, but welcome to the forum! :nice1

Moorf

[JandM]

Likewise. Life should always be serious enough for dancing bananas! Hello.:)

[ardnopes]

Due to its popularity, I just included a dancing banana on my tax return.

Thanks!

[JandM]

They'll probably think you're growing them, and try and tax you on it.:uhoh ;)