There are many special rules that expats must consider when filing their income taxes with the IRS. If you are a U.S. citizen or resident, you must report income from all sources within and outside the United States.
Tips for Filing Taxes as an American Abroad
The rules for filing tax returns are generally the same if you are living in the United States or abroad. Here are seven tips from the IRS that U.S. taxpayers with income from abroad should know:
American Expat Tax Tips
- Declare Worldwide Income . The law requires U.S. citizens and resident aliens to report any income from abroad. This includes income from trusts and bank accounts and securities abroad. New laws such as FATCA will ensure that the IRS can find out if taxpayers are hiding information about foreign bank accounts. This even applies to expats who are working jobs and living abroad.
- Present Tax Forms Required. Expat might need to file Schedule B, Interest and Ordinary Dividends, with your tax return in the United States. You will also need to submit the Form 8938 , Statement of Foreign Financial Assets specifics. In some cases, you need to file FinCEN Form 114, Report of Foreign Bank and Financial Accounts.
- Consider an Automatic Extension. If you are living abroad and can not file your return by the deadline of April 15, you may qualify for an automatic extension of two months. Then you have until June 16, 2014 to file your tax return in the United States. This extension also applies to those serving in the armed forces outside the United States. You must attach a statement to your tax explaining the reason why you qualify for the extension declaration.
- Check Income Exclusion Foreign Coming. If you live and work abroad, could claim the exclusion of foreign earned income foreign earned income exclusion . If you qualify, you pay taxes up to $ 97.600 in their wages and other income from abroad in 2013. See Form 2555 , Foreign Earned Income, or Form 2555-EZ , Foreign Earned Income Exclusion, for details.
- Do not Ignore the credits and deductions. You could take a credit or deduction for taxes paid to a foreign country. These benefits can reduce the amount of taxes you must pay if both countries will charge you taxes on the same income.
- Get Tax Help Outside the U.S. The IRS has offices in Frankfurt, London, Paris and Beijing. IRS staff in these offices can help with tax filing issues and answer your tax questions.