If you are a US citizen, then the rules for filing income tax returns and paying estimated tax are the same whether you are in the US or any other country. Also, all your overseas income subject to US income tax no matter where you live.
Expat tax rules and policies can be a headache for US citizens living abroad. If you have more questions regarding this or confused on how US expat file taxes? No matter how complicated your US tax return is, US expat taxes is ready to help you always.
American living in any other country have to file a US tax return if they meet certain income thresholds. Taxable overseas earned income includes interest, wages, dividends and rental income.
When you are living abroad and if you don't owe any tax, then you must file tax return if you meet the filing thresholds.
The 2029 tax year thresholds are:
Filing status gross income:
Single person under age 65- $12,200
Married couple filing jointly under age 65- $24,400
Head of the household under age 65- $18,350
If you are self-employed and had at least $400 in self-employment income, you have to file too. Also, there are several other circumstances where one should file US income tax return even though your income is below the listed thresholds. In order to receive the stimulus payment from CARES act for COVID 19 relief, you have to file a 2018 or 2019 tax returns.
As a US expat, you can avoid double taxation and lower your taxes with specific tax advantages. Expat taxes are different in plenty of ways from the tax return that taxpayers may have filed while living abroad in the US.
Also, while there are some additional needs for US Expats, there are many tax benefits for American living abroad.
For example:
Excluding income from taxation with FEIE
Claiming the foreign housing exclusion or deduction to cut living expenses
Applying the FTC (foreign tax credit) to offset tax paid to other countries
Using applicable tax treaty advantages to exclude other income from US taxation
These deductions, exclusions and credits, several US expats can minimize or even eliminate their tax burden.
If you are a self-employed, then you may have to pay self-employment tax
Keep in mind that self-employment US expats must know that the FEIE only excludes income from income tax. Additionally, they have to still pay self-employment tax in their net income.
The self-employment tax is 15.3 percent of the first $132,900 of income and 2.9 percent on the net income in excess of $132,900. If your residence nation has a social security totalisation agreement with the US, you can pick which nation you would like to contribute to (based on your personal and tax situation).
Keep in mind that you may end up having to pay into both the nation's systems without a tontalization agreement.
Where you can file your US expat tax
If you are a US citizen including green card holder, and you live in any other country, then you can mail your tax return to:
Department of the Treasury
Internal revenue system (IRS) center
AUSTIN, TX (USA)
Taxpayers with adjusted gross income (AGI) without a specified threshold can file their US tax return electronically.
One thing that you must understand is that if you are a US citizen, the internal revenue system doesn't care where you live, but you are still subject to its long reach. No matter where you live or where you work, you have to file a tax return with the internal revenue system and reports 100 percent of your overseas income.
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