If you are a US citizen or resident living abroad, it’s essential to understand your expat filing requirements. The US tax code is notoriously complex, and failure to comply with the rules and regulations can result in significant penalties and fines. In this post, we’ll cover everything you need to know about expat filing requirements and how to stay compliant with the IRS.

Who Needs to File?

If you are a US citizen or resident alien living outside of the US, you are still required to file a tax return with the IRS. The filing requirements are based on your income level, filing status, and age. For example, if you are single and under the age of 65, you must file a tax return if your gross income exceeds $12,550. If you are married filing jointly and both you and your spouse are under the age of 65, the income threshold is $25,100.

In addition to the income requirements, there are other factors that may impact your filing requirements. For example, if you have foreign bank accounts with a combined value of $10,000 or more, you must file an FBAR (Report of Foreign Bank and Financial Accounts) with the Treasury Department.

If you own a foreign corporation or have certain types of foreign investments, you may also be required to file additional forms, such as Form 5471 or Form 8938.

How to File

As an expat, you have several options for filing your US tax return. You can file electronically using tax software such as TurboTax or H&R Block, or you can use the services of a professional tax preparer who specializes in expat tax returns.

If you are unable to file your return by the April 15th deadline, you can request an extension until October 15th. However, it’s important to note that an extension to file does not extend the deadline for paying any taxes owed.

Benefits of Staying Compliant

Staying compliant with US tax laws as an expat is essential for several reasons. First, failure to file a tax return can result in significant penalties and fines, which can add up quickly over time. Additionally, non-compliance can result in the loss of your US passport or other legal consequences.

Staying compliant also ensures that you can take advantage of certain tax benefits available to expats. For example, the Foreign Earned Income Exclusion allows you to exclude up to $108,700 of foreign earned income from your US tax return, reducing your tax liability.

Conclusion

If you are an expat, it’s essential to understand your filing requirements and stay compliant with US tax laws. The US tax code is complex, and failure to comply can result in significant penalties and legal consequences. By staying up-to-date on your filing requirements and working with a professional tax preparer, you can ensure that you remain in compliance with the IRS and take advantage of tax benefits available to expats.