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International Taxation

Tax Services. Tax Problems. > International Taxation

US Citizens, Permanent Residents, And Other US Persons* Working Abroad And Their Tax Obligations.

US Citizens, US Permanent Residents, and other US Persons* are paying taxes on Worldwide Income.

If you are a US citizen working abroad, you are required to file a US income tax return with the IRS. You must file even if you have no income in the US.

An expatriate is an individual, who has left their country of origin in order to reside or work for a specified or unspecified period of time in another country.

There are some tax provisions that may help to low the tax burden:

The Foreign Earned Income Exclusion allows you to exclude up to $106,700 of your 2020 foreign earned income.

Reference: https://www.law.cornell.edu/uscode/text/26/911

A foreign tax credit is used when you pay tax to a foreign government. That tax is then taken into account when preparing a US tax declaration.

Reference: https://www.law.cornell.edu/uscode/text/26/subtitle-A/chapter-1/subchapter-N/part-III/subpart-A

Foreign Housing Exclusion allows a deduction from income if a US person* paid for household expenses during the living abroad.

Reference: https://www.law.cornell.edu/uscode/text/26/911

Important Filing Requirements:  

  1. FBAR (FinCEN Form 114) with the U.S. Department of the Treasury;
  2. Form 8938 with the IRS.

Penalties for not filing the above forms are severe.

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*US Persons: https://www.law.cornell.edu/uscode/text/22/6010#:~:text=%E2%80%9CUnited%20States%20person%E2%80%9D%20defined,-U.S.%20Code&text=As%20used%20in%20this%20chapter,laws%20of%20the%20United%20States.

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