Before providing you some tips on how to reduce US tax liability, I have mentioned a few very common questions asked by US Expats below. Do I Need To File US Taxes While Living Abroad? Yes, you have to! US residents and green card holders have to file and pay US taxes regardless of where they live and work. Can We Stop Of Having To File US Taxes? There is only one way to stop filing US Tax for US Citizens Living Abroad is to expatriate, giving up your US nationality or green card. Do I Have To Pay Taxes Only On Income From The US, Or Overseas Income Too? You have to pay taxes on both your national income and overseas income. But there is some exclusion available and we have discussed them later in the post. US Filing Requirements For Expats Expats, who earn more than 10,000 USD, or just 400 USD of self-employment income, have to file a US return. They can reduce their tax amount as some exclusion available.
To pick it, you must file Form 1116. Many expats are eligible for the foreign tax credit as well as the foreign earned income exclusion, but if you can also claim the child tax credit, picking the foreign tax credit over the exclusion will yield you better savings on your tax liability.
If the person is self-employed instead of employed, he can claim the Foreign Housing Deduction, instead of Exclusion. Keep in mind that for both The Foreign Housing Exclusion and Deduction claimed on Form 2555. Related Post: 5 Best Things You Need to Know About US Expat Taxes How Much Taxes do the American Celebrities Pay?
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