Does a US Citizen Living in Australia need to Pay Taxes?

 If you are a US citizen but living and working in Australia, Then you have to pay US taxes. When it comes to individual income tax filing, the United States takes a relatively unique approach. For nations that do tax income don't tax income at all. Also, there are two used systems: 1) territorial based and 2) residence based. In the territorial based taxation system, countries like Singapore tax individuals only on income from sources inside borders of the country. On the other hand side, countries like France and Germany tax their local residents on all income earned from both overseas and local sources under the residence based taxation system. For non residents in these countries, income earned locally only is taxed similar to the territorial based system.

Do you know that about 244 sovereign territories employ territorial, residence or non income taxation at all? But there are only two countries that have citizenship based taxation systems: the US and Eritrea. 

Do all US citizens living in Australia have to file income tax return?

If you are an American living In Australia, it means as a US citizen; you have to file a US tax return and pay US taxes. You are subject to the same rules about income taxation as people living stateside. Also, Americans living and working in Australia must report all their overseas income based on US tax law. Remember, this can be complicated than preparing and filling taxes for US citizens living in Australia  by filing an IRS form 1040. This is because there are often calculations and disclosures in an expatriate tax return that national tax accountants might unfamiliar with that. These are: you have to mention amounts you report on your tax return in dollars. If you receive all your income or a part of it or even pay some or all your expenses in overseas currency, you should translate the overseas currency in to the US dollars.

Why you might not have to pay US tax for US citizens living in Australia?

    • The foreign earned income exclusion rule

Average income receivers who are US citizens living abroad take heart. But, you still have to undertake the administratively burdensome job of filing every year with the internal revenue system, you likely will not have to pay a fine in most cases exclude from your income for US expat tax return purposes upto a certain amount of overseas income  and in many cases exclude or even deduct income that comes in the form of overseas housing. To qualify for this exclusion, you must have a tax income in a country other than the US, you must receive income that qualifies as overseas earned income and you must be either a bona fide resident of a country  other than US for an uninterrupted period that includes a whole tax year. Or have been physically present in a nation or nations other the US for at least 330 days during and any period of 12 consecutive months.

5 Tax Filing Tips to Help Taxpayers American Living Abroad

 

Are you preparing for US income tax filing? Filling US tax for US citizens living abroad is mandatory for everyone these days. If you don’t know “How to file US income tax return online”, then this post is for you. ITR filing online is a simple and easy process and saves you both time and energy. 

Also, if you file your US income tax return before the deadline, you can void a penalty and heavy interest as well. Filing tax returns personally is a time consuming as well as a lengthy process which involves filling plenty of pages of tax forms, which are acquired through email. Also, you need to collect the forms themselves through standing in long queues to file on time if you're unable to obtain the forms. On the other side, filling online enables you to create e-file with computer/laptop and a web connection in an easy and systematic method. In addition to this, step one of filling US income tax return online would be to set up an account with a user name, and password. Once done, the system will show you some forms that you have to complete. Keep in mind that each step contains a few but important guidelines that assist you in what to do from start to end.

We have mentioned some key steps that will help you in filing the US income tax return online. Before you start the process, you need to make sure that you have got yourself registered on the electronically filing site of the income tax department of United States Of America. 

1. Taxpayers American living abroad have to assemble all the required documents to file online. For example- Salary slips, rental income, interest certificates documents that indicate capital gain/loss. Any other document that proves any income earned during the financial year. 

2. Once you have assembled all the essential documents, now login to the e-filing account on the website of the income tax department. Later than you login, you will see 'filing of the income tax return' on the dashboard, now click on it. Choose the assessment year for which you want to submit it. When you submit it, ensure that you are using the right form.

3. Remember you have to verify all the details carefully such as name, address, etc. After verifying the details, you need to fill other details in the form using the documents you assembled in the beginning. Also make sure that you fill the right details under every head of income, exemptions, and deductions.

4. Once you have verified all the details, now you can file. It is the final step of the online process of filing an Income tax return. However, the return you filed needs to be verified, particularly if you want to get the ITR processed by the income tax department. Income tax department starts its processing after the verification of return.

5. Once it is processed, now income tax department informs you about this simply by sending a mail on your registered email ID. In vase they found any mistakes or errors, they will ask you to correct that or explain them about that.

If you are not familiar with the process of filing ITR online, hire professional of  American Expat tax services who have knowledge and skills of the e-filing process.

Let's Know about UAE tax for US citizens living in UAE

 

The UAE (United Arab Emirates) has an expatriate population about 10 million and is globally known as the center for finance and commerce in the middle East. The UAE is increasingly promoting itself as a tax haven. If anyone who is an American expat, but he or she continues to be subject to US expat taxes no matter where that person lives. This somewhat dilutes the low tax appeal of the United Arab Emirates. This post will help you understand your tax responsibilities as a US Expat else in the UAE.

Know about taxes for US citizens living in UAE

There is no federal tax legislation in the UAE, and the UAE is considered a non tax nation. Currently, there is no income tax, corporate tax with no withholding and capital gain tax. Some businesses, particularly in the finance and petroleum producing industries are subject to taxation but most corporate entities are exempt. But, the United Arab Emirates has introduced s value added tax (VAT) of upto 5 percent on goods and services since Jan 2018 unless a special exemption applies.

Let's know about the tax due date in the UAE

There is no income tax collected from individuals, and filing a return is not needed. Overseas income is not taxed by the UAE that means you just need to worry about your US taxes.

Let's know about taxation of US expat in the UAE

If you are an US expat or permanent resident, you are obligated to file US expat taxes with the federal government every year whether you live in Abu Dhabi or Albuquerque. You could be required to file an informational return on your assets held in overseas bank accounts. Also, while the US is one of the few Governments that tax worldwide income of its citizens as well as permanent residents.

The overseas earned income exclusion let's you decrease your 2020 taxable income by the first $105,900 earned as a result of your labor while a resident of an overseas nation.

 The foreign tax credit that could let you lower your tax amount on your remaining income by certain amounts paid to an overseas government. On the other hand side, a foreign housing exclusion let's an additional exclusion from taxable income for certain amounts paid for household expenses that happen as a consequence of living abroad. With right planning and tax preparation, you must be able to take benefits of these and other strategies to reduce or even eliminate your liability on US expat taxes.