What You Need to Understand about US Expat Taxes

What You Need to Understand about US Expat Taxes


One of the few countries that taxed people on their worldwide income is- The United States, no matter where that income is earned and where you live. This informative post will help you make sense of the complicated issues related to US expat taxes.

This post mainly focuses on the major areas that you have to be aware of. So take a look at them.

• The Foreign Earned Income Exclusion

 If you are a qualified US citizen live and work abroad then you can save a big amount of money on your expatriate tax return by filling out the form of the foreign earned income exclusion. A US resident or citizen alien should have earned income in a foreign country, should meet the bona fide residence or physical presence test or a regular place of business outside the US. The exclusion is claimed on form 2555 as well as attached to form 1040. You may qualify for the foreign housing credit in case you qualify for the foreign earned income exclusion on your US expatriate tax return that will let you deduct up to $27450 of your housing cost.

• Do You Need To File State Taxes?

Each state varies in how they find out the filling needs of your US expat taxes. In addition to this, some states have no personal tax like Texas, Washington, and Florida while some States like Virginia and California consider whether you have retained certain rights as a citizen of US like financial accounts, ownership of assets and a driver's' license to find out your future. If they find that you intend to return to the state you resided in previously, they still need you to file a big tax return

•  Foreign Bank Accounts

A US citizen who has one or more foreign account(s), as well as the cumulative balance of these accounts, exceeded $10,000 at any time during the calendar year, in this case, that person has to file Form TDF 90-22.1 Report of Foreign Bank plus Financial Accounts (FBAR) by June 30 every year. Keep in mind that this form is filed separately from your US Expat taxes, and must be received by the Treasury on June 30th.

• Dates For Filing

Generally, as a US citizen, you are required to file your US income tax returns by April 15. But, a US Citizens Living Abroad Expat Taxes gets an automatic extension to file their US Expat taxes until June 15. In spite of the automatic extension, all US Expat taxes need to be paid by April 18 to avoid any late charges. You will get an automatic extension to file their US expatriate taxes by attaching a statement to Form 1040 when filed by June 15. Via Form 4868, an additional extension to October 15th can be requested.

The above is meant to be a general idea only- consult with a tax professional for filing your US expat taxes.