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Latest revision as of 16:21, 16 May 2026

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Defenders within the IRS position would say it pops up to Section 61. The waitress provided a service for me, and I paid for the product. Compensation for services is taxable. End of deal.

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Julie's total exclusion is $94,079. In her American expat tax return she also gets to claim a personal exemption ($3,650) and standard deduction ($5,700). Thus, her taxable income is negative. She owes no U.S. taxes.

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The Tax Reform Act of 1986 reduced the actual rate to 28%, at the same time raising backside rate from 11% to 15% (in fact 15% and 28% became quick cash two tax brackets).

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