U.S. Expat Tax Return Filing Requirements At a Glance
If you are a U.S. citizen or permanent resident (green card holder), you must file U.S. Federal income tax returns even after you move outside the U.S. This requirement is different than in most countries. You must file the returns if your total income (before exclusions and deductions) exceeds $9,350 for single or $18,700 for married filing jointly. You can't file a joint return if your spouse is not a citizen or resident of the U.S.
Filing a return does not mean you owe U.S. tax. With the Foreign Earned Income Exclusion on Form 2555 you can exclude $91,500 of foreign salary. This exclusion is increased for the foreign housing amount (generally what you spent in excess of $40.11 per day for housing overseas). In addition, the Foreign Tax Credit on Form 1116 may reduce your U.S. tax to zero. You can claim these only if you file a return. The exclusion may be denied if you have not claimed it before and your return is late.
When and where to file. Federal tax returns are due for people living outside the U.S. on June 15, not April 15. You need do nothing to get this extra time; just show your foreign address on the return. If you even more time, an automatic extension until October 15 is available by filing the very simple Form 4868. If you need time beyond that to qualify for the foreign earned income exclusion, the IRS can grant an additional extension until the following February 15 by filing Form 2350.
Expat tax returns are filed with the IRS at Austin, TX 73301-0215 USA. If a payment is due, file with IRS, P.O. Box 1303, Charlotte, NC 28201-1303, USA. You can also file through the nearest U.S. Embassy or Consulate, though that is not always reliable.
E-filing provides a more reliable way to file. Most tax professionals can e-file your return. I provide e-filing for my clients at no extra charge. With e-file, you know your return was accepted by the IRS for processing within a day or two. In addition, e-filing with direct deposit means you generally get any tax refund in less than 10 days.
States. Once you move out of the U.S., you are probably no longer a resident of your old state. New York and a few states may try to claim that if you come back within five years you never left, but their success in such claims is limited. As a nonresident, you are not subject to tax in that state unless you earn money in the state. Income in the state includes salary or business income earned there, or income from an interest in a partnership or S corporation with operations in the state. Renting out your old home will likely trigger a state income tax filing requirement. State filing requirements vary; check your state's income tax website or ask your tax return preparer.
Complexity. Expat tax returns are often more complex than regular returns. However, the IRS has provided some "EZ" forms to make filing simpler. If your only income is salary and bonus of less than $91,500, you may be able to file Form 2555-EZ. This simple 2 page form asks questions about where you live and work, and your visas and travel. It must be filed with Form 1040. The total effort is not much different than filing Form 1040-A. If you don't qualify for the EZ form, and especially if you have significant foreign income taxes, your return can be far more complex. You can get all IRS Forms online, where you can also find informaton about e-file.
Don't miss out on tax benefits that can eliminate your U.S. income tax. File your return on time. Get the professional help you need from Steve Fox, CPA.
Filing a return does not mean you owe U.S. tax. With the Foreign Earned Income Exclusion on Form 2555 you can exclude $91,500 of foreign salary. This exclusion is increased for the foreign housing amount (generally what you spent in excess of $40.11 per day for housing overseas). In addition, the Foreign Tax Credit on Form 1116 may reduce your U.S. tax to zero. You can claim these only if you file a return. The exclusion may be denied if you have not claimed it before and your return is late.
When and where to file. Federal tax returns are due for people living outside the U.S. on June 15, not April 15. You need do nothing to get this extra time; just show your foreign address on the return. If you even more time, an automatic extension until October 15 is available by filing the very simple Form 4868. If you need time beyond that to qualify for the foreign earned income exclusion, the IRS can grant an additional extension until the following February 15 by filing Form 2350.
Expat tax returns are filed with the IRS at Austin, TX 73301-0215 USA. If a payment is due, file with IRS, P.O. Box 1303, Charlotte, NC 28201-1303, USA. You can also file through the nearest U.S. Embassy or Consulate, though that is not always reliable.
E-filing provides a more reliable way to file. Most tax professionals can e-file your return. I provide e-filing for my clients at no extra charge. With e-file, you know your return was accepted by the IRS for processing within a day or two. In addition, e-filing with direct deposit means you generally get any tax refund in less than 10 days.
States. Once you move out of the U.S., you are probably no longer a resident of your old state. New York and a few states may try to claim that if you come back within five years you never left, but their success in such claims is limited. As a nonresident, you are not subject to tax in that state unless you earn money in the state. Income in the state includes salary or business income earned there, or income from an interest in a partnership or S corporation with operations in the state. Renting out your old home will likely trigger a state income tax filing requirement. State filing requirements vary; check your state's income tax website or ask your tax return preparer.
Complexity. Expat tax returns are often more complex than regular returns. However, the IRS has provided some "EZ" forms to make filing simpler. If your only income is salary and bonus of less than $91,500, you may be able to file Form 2555-EZ. This simple 2 page form asks questions about where you live and work, and your visas and travel. It must be filed with Form 1040. The total effort is not much different than filing Form 1040-A. If you don't qualify for the EZ form, and especially if you have significant foreign income taxes, your return can be far more complex. You can get all IRS Forms online, where you can also find informaton about e-file.
Don't miss out on tax benefits that can eliminate your U.S. income tax. File your return on time. Get the professional help you need from Steve Fox, CPA.
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