Will I get taxes twice?

Hello,

I am starting to think about my taxes for year 2005. I wanted to go ahead and claim the foreign tax exclusion based on being in the UK for over 330 days (would file extension) However, I have decided to go on a long vacation - 2 - 3 months. This would obvsiously mean that I cant claim the " Foreign tax exlcusion" Does this mean I will now get taxed twice on the money earned in the UK?
Yikes! Help!

are you going back to the US for the entire 2-3 month vacation? I am nowhere near a tax pro, but if you did,  I'd think you couldn't claim it but if you went anywhere else you could since technically you are still out of the US for how ever many days is required.

You can claim Foreign Earned Income Exclusion based on Physical Presense or Bona Fide Residence tests.  The PP test is 330 days.  The BFR test requires that you are tax resident in a foreign country. 

Depending on how much time you spend in the US and how much in the UK, you may be eligible to file as US resident for the entire year, and claim UK nonresidency under the US/UK treaty.   US taxes are generally lower than UK, but not always.

In no way will you be taxed twice, because whenever residency laws do not work in your favour, you are eligible for Foreign Tax Credits that will wipe out the portion of tax in the second country equivilent to the actual tax owed in the first country.

To best utilize foreign tax credits, you must pay any UK balance due for 04/05 on 31 Dec 05 instead of 31 Jan 06.

Send an email if you have any further questions.