American expats: Mark these tax deadlines on your calendar for 2017 (2024)

FAQs

How do taxes work for American expats? ›

If you are a U.S. citizen or resident living or traveling outside the United States, you generally are required to file income tax returns, estate tax returns, and gift tax returns and pay estimated tax in the same way as those residing in the United States.

As an American expat, i.e. a taxpayer living outside the US on April 15, you get an automatic 2-month extension, bringing you to the extended deadline of June 15 – as an automatic extension, I sometimes refer to it as “automatic automatic” since no form needs to be filed; you have it just by living in a foreign country ...

The U.S. is one of only two countries in the world where taxes are based on citizenship, not place of residency. If you're considered a U.S. citizen or U.S. permanent resident, you pay income tax regardless where the income was earned.

TurboTax is primarily tailored for taxpayers residing and working within the United States. As such, its capabilities to support US expatriates are somewhat limited, and expats may find it challenging to address common expat tax issues.

Some American expats who work abroad may also need to pay US Social Security and Medicare taxes on their earned income. For example, self-employed US expats and those who work for a US-based employer must file an expat tax return. For the 2023 tax year, the rate for expat employees is 7.65%.

The penalty for not filing your tax return is 5% of the amount of tax shown on the return for each month you have not filed, up to 25% of your tax owing. If you fail to pay, the IRS imposes a ½ percent penalty for each month that the amount remains unpaid, up to 25% of your total tax owing.

The deadline to file your U.S. tax return is April 15, 2024, but U.S. citizens abroad are granted an automatic extension to June 17, 2024. If you end up owing taxes, the deadline to pay tax due is April 15, regardless if you live stateside or abroad.

Do not assume that since you have left the US you are not obligated to file a state tax return. Each state has its own set of rules about whom it considers a “resident” and their own minimum filing requirements. Most states, but not all, also allow the foreign earned income exclusion in determining taxable income.

The IRS considers you a U.S. resident if you were physically present in the U.S. on at least 31 days of the current year and 183 days during a three-year period.

The US is one of the few countries that taxes its citizens on their worldwide income, regardless of where they live or earn their income. This means that American expats are potentially subject to double taxation – once by the country where they earn their income, and again by the United States.

What happens if I don't file my taxes while living abroad? ›

The failure to file penalty is the most expensive; you can be charged 5% of the amount you owe, with the fine increasing by an additional 5% each month (up to a maximum of 25% of your bill).

Americans who retire overseas still have tax obligations. Typically, you will have to file a tax return with both the US government and your new host country. You may even have to file a tax return with the US state you used to live in.

An expatriate or expat is an individual living and/or working in a country other than their country of citizenship. The arrangement is often temporary and for work reasons. An expatriate can also be an individual who has relinquished citizenship in their home country to become a citizen of another.

The H&R Block Expat Tax Services software is a cloud-based program that's completely online. You can get started online for free and won't pay until you're ready to review and approve your tax return. Once you've paid and approved your return, H&R Block will e-file it for you.

Do I still need to file a U.S. tax return? Yes, if you are a U.S. citizen or a resident alien living outside the United States, your worldwide income is subject to U.S. income tax, regardless of where you live. However, you may qualify for certain foreign earned income exclusions and/or foreign income tax credits.

The US is one of the few countries that taxes its citizens on their worldwide income, regardless of where they live or earn their income. This means that American expats are potentially subject to double taxation – once by the country where they earn their income, and again by the United States.

The answer depends on the state. Some U.S. citizens and residents living abroad must file a state tax form, but not all expats are required to do so. What U.S. expats do for state taxes depends on which state they lived in before their move to another country.

Potential Refunds. Most US expats will not owe US taxes thanks to certain expat tax benefits such as the FEIE (Foreign Earned Income Exclusion), FTC (Foreign Tax Credit), and international tax treaties. As US taxpayers abroad may deduct or exclude tax debt, qualifying expats may see a payment for refundable tax credits ...

Mark-to-Market Exit Tax

Covered expatriates must pay a capital gains tax on all other assets above an inflation-adjusted exclusion limit ($767,000 in 2022, up from $744,000 in 2021) as if they sold those assets on the day prior to the date of expatriation.