US Citizens Abroad
US federal and state tax return preparation
Assistance with voluntary disclosures for taxpayers with delinquent tax filings
Assistance with expatriation issues and exit tax
U.S. citizens are required to file an annual income tax return Form 1040 with the Internal Revenue Service (IRS) regardless of whether they live and work in the United States or abroad. It does not mean that American expatriates have to pay additional taxes to the U.S. government if the already pay tax in the country where they work; in the most common case it is more of a reporting requirement that should not be overlooked. This reporting requirement is unique to the American community abroad in a sense that no other country in the world imposes such tax filing requirement to its citizens abroad.
While there are situations where the US citizen abroad may have to pay tax to the U.S. government for income earned abroad, usually this is not the case. The taxes paid in the foreign country can be taken as a Foreign Tax Credit to fully offset the US tax liability. Even if the foreign taxes are not sufficient, US citizens abroad are allowed to fully exclude on their U.S. tax return up to $102,100 of foreign earned income exclusion in 2017. The key point is that they have to still file a return to declare their foreign earned income, before they can take advantage of either the related foreign tax credit or income exclusion. In short, unless the taxpayer’s earned income for the entire year is below the personal exemption and standard deduction amounts ($10,400 in 2017) a return has to be filed with the IRS.
U.S. permanent residents (those who hold a Green Card) have almost identical reporting requirements to those of U.S. citizens, although they may be more flexible with their tax residency choice if they live in a country that has a comprehensive tax treaty with the United States. Click here for more information.
If you wish, we can evaluate your personal situation and determine whether claiming a foreign tax credit or claiming the exclusion is the more beneficial option for you. We can also provide you with a no obligation personalized quote for the preparation of your return.
Please click here to complete our information request form and one of our US tax specialists will be in touch with you shortly.