Generally I claim the foreign earned income exclusion and pay $0 to the US. But IF I am self-employed and owe self-employment tax (and I haven't determined that yet), then I owe that and I can't exclude it, not even via the double-tax treaty (US-NZ doesn't have a social security treaty). But if I am engaged in a not-for-profit activity (even without being a US 501(c)(3) this can still apply) then the income is treated differently.... and I think it applies since open source software benefits everybody, not just me, and the grant covers my living expenses and was even paid by a 501(c)(3) as living expenses to a grantee. So now I'm going down this instruction at the top of Schedule C: "For example, a sporadic activity, a not-for-profit activity, or a hobby does not qualify as a business. To report income from a nonbusiness activity, see the instructions for Schedule 1 (Form 1040), line 8j"
Did I mention yet that I hate doing my taxes?
We all hate taxes my friend. I will be following your results. I know it's pretty fcked for US peeps outside the US. Do you have anyone helping you on this? Just curious.