Daughter to work 2016 summer internship in Japan - what to plan for Taxes?

[dundee]

Greetings tax experts,

My daughter who is a college student, has found a summer internship in Japan. She will spend 7 weeks there next summer in 2016. She will get paid while there.

I have no experience with overseas taxes, although, I have done her US taxes in the last 2-3 years since she started working.

How do the taxes work for such cases? Does she get taxed in both places? Does anybody here have experience paying taxes in Japan as a foreigner? Are the taxes as difficult to do there as here? Are there any things she needs to be doing right now that will make her tax life easier later?

Appreciate all your help as we navigate the unfamiliar territory. Thank you.

[arebelspy]

"Foreign earned income exclusion" is the thing you want to Google.  She likely won't pay anything here.

[dundee]

Thanks, just looked up the foreign earned income exclusion on IRS site. Seems like she won't qualify since she will work there only for 2 months.


Requirements

To claim the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction, you must have foreign earned income, your tax home must be in a foreign country, and you must be one of the following:
•A U.S. citizen who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year,
•A U.S. resident alien who is a citizen or national of a country with which the United States has an income tax treaty in effect and who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year, or
•A U.S. citizen or a U.S. resident alien who is physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months.

[arebelspy]

Ah, of course. I thought she was moving there after college, read too fast. Sorry.  Glad you found it despite my post. :)

[Proud Foot]

You should be able to count the taxes paid as either a credit or itemized deduction.  Which one to take depends on your situation.This also assumes that her foreign income is also subject to US Income taxes.

You can find more information here:
https://www.irs.gov/Individuals/International-Taxpayers/Foreign-Tax-Credit 

[MDM]

...daughter...has found a summer internship in Japan.
...
How do the taxes work for such cases? Does she get taxed in both places? ...
 Are there any things she needs to be doing right now that will make her tax life easier later?

Those are some very good questions that your daughter should ask the hiring company, and/or the organization that facilitated her finding the internship.  How she is taxed will depend on, among other things, how she is paid.