@JapanCustomTours, yeah, re-reading my first comment I did make it seem like ONLY US and Eritrean citizens pay taxes abroad, which isn't true, so sorry about that. As a US citizen living only in Japan, I don't own any assets like property or a car in the US, and my "tax home" is Japan; nevertheless, I must still pay US taxes on things like my Japanese bank account (if it ever had any money in it, ha... ha...), which is reported to the IRS. For those that go between 2 countries, or maintain their tax home in one but often work in the other, it is indeed complicated. But in my case (and I think, in the long run, the OP's), my tax home is only Japan so I should only have to pay Japanese taxes... but that's not the case. I still have to file US taxes too even though I am legally a resident in another country for the entire year.
@the OP, as I said in another comment, and Naoki said again, there is a threshold where you will not be taxed, if your income is under a certain amount, which is calculated by how many days you have been in the US versus the country that is considered your "tax-home". The form is called the 2555 (there is also the 2555-EZ, which I file), which along with the 1090 (not the EZ version) proves to the government that I a) work and live in Japan and not the US, and am therefore able to take the exclusion, and b) that I am not liable to pay any taxes on my Japanese income because it does not exceed appx. $90,000 that is my credit. This amount is determined by how many days I live in Japan in a given year, so since I usually visit my family in the US for about 2 weeks a year, those 2 weeks count against me, and so the credit goes down. If you spend the entire year in Japan, you'd have a credit of up to about $100,000. Again, an average ALT job teaching English is going to make somewhere from $30,000 to $40,000 a year. This is simplified obviously, because other things like assets, bank accounts, dependents, and college debt change things.
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