2011 Update on Iraq Shutdown
Update on Iraq Shutdown:
We have recently learned that several sites in Iraq will remain open for civilian contractors. Keep in mind that even though the military will no longer be present in Iraq, civilians must still meet a presence test in order to qualify for foreign income exclusion. You still have the option of using a calendar-year or contract-year presence test; just remember that the calendar-year presence test is the most beneficial, as it allows you to take the full exclusion in each calendar year.
Since civilians in Iraq will no longer be working in direct support of the US military, the 180-day combat zone extension of time to file and pay taxes will no longer apply. If you are in Iraq, you should file your 2011 tax return no later than April 16, 2012.
Best regards,
Palazzo & Company, LLC
