Tax Information for US Citizens Living Overseas
I’m a US citizen and live abroad. Do I Need to File a Tax Return?
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. However, most Americans overseas qualify for foreign earned income exclusions and/or foreign income tax credits.
When and where do I file my US return?
If you are a U.S. citizen or resident alien residing overseas, or are in the military on duty outside the U.S., you are granted 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. If you prepare your return yourself, it can be mailed to Department of the Treasury, Internal Revenue Service Center, Austin, TX 73301-0215. Current year returns prepared by us will be electronically filed for you.
What is FATCA and FBAR?
The Foreign Account Tax Compliance Act (FATCA) generally requires certain U.S. taxpayers who hold foreign financial assets with an aggregate value of more than the reporting threshold of $50,000 to report information about those assets on Form 8938, which must be attached to the taxpayer’s annual income tax return. The threshold to file Form 8938 is higher if you live overseas or file a joint return. A United States citizen or resident must file a Form 114 Report of Foreign Bank and Financial Accounts (FBAR) to report an interest in financial accounts located outside the United States if the total aggregate value of those foreign financial accounts exceeded $10,000 at any time during the calendar year reported. This is a reporting obligation only. These reporting requirements do not calculate any tax and no tax is due just because they are filed. We can prepare these forms for you to be filed electronically with your tax return.
What if I haven’t filed my US taxes for many years?
Many Americans living abroad are eligible for streamlined filing compliance procedures offered by the IRS. Taxpayers must certify that their failure to pay all tax due and to report foreign financial assets did not result from willful conduct on their part. In most cases, tax returns for the most recent 3 years past due and FBARs for the most recent 6 years past due must be filed. We can prepare the streamlined package for you, including your past due tax returns and FBARs, if this option is appropriate for your situation.