Expat Tax Return Filing Requirements

Expat Tax Return Filing Requirements

The tax filing requirements for expats.

If you are a U.S. citizen or resident alien and are living overseas, the rules for filing a US income tax return and for paying estimated tax are generally the same as if you were residing within the United States.

2017 filing requirements for most people

You’re required to file a return for 2017 if you have a certain amount of gross income. Gross income requirements for each filing status are:

  • Single:

    • $10,400 if under age 65

    • $11,950 if 65 and older

  • Married filing jointly:

    • $20,800 if both under 65

    • $22,050 if 1 spouse is 65 or older

    • $23,300 if both 65 or older

  • Married filing separately — $4,050 at any age

  • Qualifying widow(er) with a dependent child:

    • $16,750 if under 65

    • $18,000 if 65 or older

  • Head of household:

    • $13,400 if under 65

    • $14,950 if 65 or older

Self-employed persons.  

You must file a U.S. income tax return if you had $400 or more of net earnings from self-employment, regardless of your age. Net earnings from self-employment include the income earned both in a foreign country and in the United States.

You must pay self-employment tax on your self-employment income even if it is earned in a foreign country and is excludable as foreign earned income in figuring your income tax.

The filing requirement also applies to estate and gift tax returns for expatriates. These rules apply only to your federal income tax return. Different filing rules apply for each US state.

Your income converted to US dollars, filing status, and age generally determines whether you must file an income tax return. Generally, you must file a return if your gross income (What is gross income?) from worldwide sources is at least the amount shown for your filing status in the following table. If you are self-employed, you have different filing requirements (see here).

Gross income is defined as all the income you receive in the form of money, goods, property, and services that is not exempt from tax.

For Americans living abroad it is important to point out that for the purposes of determining whether you must file a return, gross income includes any income that you can exclude as foreign earned income or as a foreign housing amount.

I am self-employed overseas.

If you are self-employed, your gross income includes the amount on Part I, line 7 of Schedule C (Form 1040), Profit or Loss From Business, or line 1d of Schedule C-EZ (Form 1040), Net Profit From Business.

Taxpayers Living Abroad

If you are a U.S. citizen or resident alien, the rules for filing income, estate, and gift tax returns and paying estimated tax are generally the same whether you are in the United States or abroad. Your worldwide income is subject to U.S. income tax, regardless of where you reside.

When to File

If you are a U.S. citizen or resident alien residing overseas, or are in the military on duty outside the U.S., on the regular due date of your return, you are allowed an automatic 2-month extension to file your return without requesting an extension. For a calendar year return, the automatic 2-month extension is to June 15.  Note that you must pay any tax due by April 15 or interest will be charged starting from April 15.

Where to File

If you are a U.S. citizen or resident alien (including a green card holder) and you live in a foreign country, mail your U.S. tax return to:

Department of the Treasury
Internal Revenue Service Center
Austin, TX 73301-0215
USA

There are several income tax benefits might apply if you meet certain requirements while living abroad. You may be able to exclude from your income a limited amount of your foreign earned income.

You also may be able either to exclude or to deduct from gross income your housing amount. To claim these benefits, you must file a tax return and attach Form 2555, Foreign Earned Income. If you are claiming the foreign earned income exclusion only, you may be able to use the shorter Form 2555-EZ, Foreign Earned Income Exclusion, rather than Form 2555.

You may, on your U.S. return, be able to claim a tax credit or an itemized deduction for the foreign income taxes that you pay. Also, under tax treaties or conventions that the United States has with many foreign countries, you may be able to reduce your foreign tax liability.

Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad,

.

Publication 514, Foreign Tax Credit for Individuals, and

.

Publication 901, U.S. Tax Treaties, discuss in detail the treatment of your foreign income, the foreign tax credit, and the general tax treaty benefits available to you.

Who must file.  

Your age, filing status, gross income, and whether you can be claimed as a dependent by another taxpayer determine whether you must file a U.S. federal income tax return. To determine if you meet the gross income requirement for filing purposes, you must include all income you receive from foreign sources as well as your U.S. income. This is true even if:

·        The income is paid in foreign money,

·        The foreign country imposes an income tax on that income, or

·        The income is excludable under the foreign earned income exclusion, discussed later.



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