The basics are simple, albeit the details can be complicated, but it looks to me like you may be confused about those basic facts -- so you should definitely have your U.S. or Belize CPA or tax attorney 'splain it to you:

As a U.S. citizen, you owe income taxes on earnings and other income (dividends, interest, royalties, etc.) on your WORLDWIDE income.

However, there is an exception -- on FOREIGN EARNED income (that is, FOREIGN WAGES, in this case wages earned in Belize) up to the current excluded amount, US$91,400 for 2009 and US$91,500 for 2010 tax years -- if you meet certain strict tests such as physically living outside the U.S. for 330 days in a year or not claiming that you are not a resident of Belize subject to Belize taxes.

If you earn the money in the U.S., or are paid from a U.S. business, you don't get the exclusion. The exclusion also doesn't apply to non-earned income such as interest and dividends. There are some other potential benefits, such as an exclusion for foreign housing and education for your children.

As a U.S. citizen living in Belize, you don't owe Belize taxes on income earned outside Belize, but if you are earning the money IN BELIZE you DO owe Belize taxes, possibly both business taxes (the gross turnover tax) and personal income tax.

In other words, you can't earn income in the U.S. and get a foreign earned income exclusion, AND you can't live in Belize and earn income in Belize without paying Belize business and personal income taxes (which in some cases are higher than U.S. taxes).

You're going to have to pay the piper one way or the other. In other words, you are likely going to have to pay EITHER Belize taxes or U.S. taxes.

--Lan Sluder