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Exchange rates when doing your taxes?
So, I’m filling out my 2008 taxes (I got a 6 month extension). I’ve been living in Japan, so I earned my money in yen. I’m supposed to convert the yen to dollars for the tax form. There are websites that have official exchange rates… but which exchange rate should I use? Should I use the current one, even though the income I earned was in 2008? Or should I use the exchange rate for April 15, 2009, when my income taxes were originally due? Or some exchange rate from 2008? Anyone have any idea how this works? I could call the IRS, but their office won’t be opened for a long time, and I would like to get working on the form today.
The IRS actually wants you to use the rate on each day you got paid or the rate on each date when you paid items which would lead to a tax deduction.
Or if you didn’t do it, the IRS will allow a yearly average rate. For Japan for 2008, the rate was 103.466 yen to the dollar.
http://www.irs.gov/businesses/small/international/article/0,,id=206089,00.html
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