Yes, US expats are subject to paying taxes in the United States if they meet specific criteria. If you are a US citizen living abroad and earn over the minimum income amount (domestic and foreign income combined), you must file a US tax return.
The income taxed can consist of the following:
- Capital gains
- Rental Income
When filing US taxes, expatriates should be aware of the following:
- Expats must file their taxes by the same deadline as US taxpayers, April 15 each year (or the following Monday if April 15 falls on a weekend or holiday).
- Expats may be eligible to use the Foreign Earned Income Exclusion to exclude a certain amount of their foreign-earned income from US taxation.
- Expats may also be eligible to use the Foreign Tax Credit, which allows them to offset their US tax liability by the amount of foreign taxes they have paid.
- Expats should be aware of the FBAR filing requirement if they have foreign bank accounts with a total balance of $10,000 or more at any point during the year.
For a better understanding of what works best for your unique tax situation, the tax preparation team at Gordon Law Group can help ensure that you comply with all relevant tax laws and take advantage of any available tax benefits!