Get your expat taxes done wherever you are in the world starting at $399

US citizens living abroad have a US expats taxes obligation. Here are some basic rules behind US expat tax rules and regulations to file.

For American taxpayers living abroad, taxes can seem confusing at best and downright complex at worst. As a US citizen living in Australia, you probably have a host of questions, like do US citizens have to pay taxes on their foreign income? Or what is federal tax for non residents Americans settled in Australia?

If these questions sound familiar to you, you are not alone! US expat taxes rules can be complicated and confusing for even the most financially savvy Americans; it is thus imperative to hire excellent and professional US expat taxes services in Australia to help you file your US expat tax return in a straightforward and hassle-free way.

As a US expat you might wonder if you have a tax obligation to the IRS as long as you are an American citizen and a green card holder.

So are you ready for US tax filing? Professional American expat tax services help you file your expat taxes quickly and accurately.

Do the US Citizens Living Abroad Are Liable for Filing Taxes?

Yes, US citizens living abroad have to file returns to pay US income tax if they meet the filing thresholds, which is normally equal to the standard deduction for filing your return. Have you wondered why American citizens living in Australia have to pay taxes on income earned abroad?

US taxes are based on citizenship, not a country of residence. That means it does not matter where you reside; if you are a US citizen, you have a tax obligation. Your expat tax filing requirement does not change even if you are paid by a foreign employer overseas.

In addition to federal income taxes, some American expats in Australia are also liable to file state taxes, depending on their last state of residence. Their taxable foreign income includes interest, dividends, wages, rental income, and qualified retirement account distributions.

Also, if a US citizen in Australia has foreign financial accounts or assets, they must report them to the IRS while filing their US tax. The IRS requires citizens to disclose international financial accounts that hold $10 000 or more at any time in a year by filing a Foreign bank account report.

In case US citizens residing abroad have foreign assets with a value higher than $200,000 they may also have to file FATCA Form 8938. If you are an American citizen living in Australia and have never filed a tax return, IRS has a shield for honest expats who do not know they have to file the returns.

How Much Taxes Do US Expats Living Abroad Pay If They Work Overseas?

It is clear that US citizens have to pay American taxes on their foreign income; a million-dollar question is how much taxes they have to pay if they work overseas. It is challenging to digest whether they will have any money left in their bank account after paying both their US taxes and host country income tax liabilities.

Even though most US citizens working abroad in Australia must file taxes, expat tax rules have evolved, so most expats do not owe any amount at the year’s end.

Is There a Tax Exemption for US Citizens Living Abroad?

The most common question is, do American expats living in Australia have to face double taxation? No is the answer! Americans do not have to pay double taxes. There is no general US expat tax exemption; there are credits and exclusions to help reduce the tax burden for US expats.

These include-

1. The Foreign Earned income exclusion – FEIE and the Housing Exclusion: The FEIE and housing exclusion allow US expats to exclude up to a specific amount of foreign-earned income if they adhere to particular needs.

2. Foreign tax credit: This allows US expats to claim a dollar-to-dollar credit on foreign taxes paid if they meet a certain threshold.

3. Tax treaties: To do away with the double taxation of US expats, America has treaties with many countries. The United States of America has a formal tax treaty with Australia. This US-Australia tax treaty helps the American expats living abroad avoid double taxation while residing in Australia. America also has a totalization agreement with Australia, which clarifies whether an American living abroad should contribute to the Australian or US social security system.

Wrap up

You must work with a professional, qualified, and reputed tax help for expats in Australia who will help you ‘how to file your US income tax return online’ and help manage your worldwide tax burden.