Expat Tax Compliance

If you are a citizen living or working abroad, it is essential to understand and comply with expat (Expatriate) tax filing requirements. As a U.S. citizen or green card holder, you are required to file a U.S. tax return and report your worldwide income, regardless of where you live or work. Failure to comply with these requirements can result in hefty fines and even criminal penalties. Conversely, these foreign tax filing requirements also apply to expats from other countries working or living in the U.S.

Understanding the complexities of the U.S. tax system can be challenging for expats (U.S. or foreign citizens), and in cases of expat filing issues or delinquency, it's important to consult with an international tax attorney and CPA that can assist with expat filing compliance. Pure Tax International specializes in counseling U.S. and foreign expats working or living abroad to resolve expat filing issues and maintain compliance.

Expat Tax Filing Requirements for U.S. Citizens Living Abroad

U.S. citizens and green card holders are required to file a U.S. tax return and report their worldwide income, regardless of where they live or work. This means that if you live and work abroad, in most cases, you are still required to file a U.S. tax return and report your income from foreign sources. To determine whether you need to file a U.S. tax return, you need to consider your income, filing status, and age.

For the tax year 2022, if you were single and under the age of 65, you need to file a tax return if your income was at least $12,950. If you were married filing jointly and both under the age of 65, you were required to file a tax return if your income was at least $27,400. If you have foreign income, you will also need to report it on your U.S. tax return. This includes income from foreign employment, self-employment, investments, and rental properties. You may also need to file additional forms, such as the Foreign Bank Account Report (FBAR) and the Foreign Account Tax Compliance Act (FATCA) Form 8938 to disclose your foreign assets.

Our team of expat tax filing experts can help bring clarity to your unique tax filing requirements, including filing all necessary paperwork and representing you with the IRS to make sure all offshore and expat tax reporting is in compliance.

Expat Tax Exclusions

Expats may also be eligible for various tax benefits and exclusions, such as the foreign earned income exclusion, foreign housing exclusion, and foreign tax credit. These tax benefits can help reduce your U.S. tax liability and prevent double taxation. If you have paid foreign income tax on wages earned abroad, you may qualify to receive a credit to offset your U.S. income tax.

Expat Tax Filing Requirements for Foreign Citizens Living in U.S. (Substantial Presence Test)

The "Substaintial Presence Test" is the standard used to determine if a foreign citizen currently living in the U.S. is deemed a U.S. citizen for tax purposes (required to file U.S. income tax return). The threshold for being recognized as a taxpaying citizen is at least 31 days during the current year, and, a total of 183 days on U.S. soil for the current year and the previous 2 years. Exemptions to these regulations include teachers, students, and professional athletes that fall within certain visa classifications. (Source: https://www.irs.gov/individuals/international-taxpayers/substantial-presence-test)

If you are a foreign citizen in the U.S. that is facing tax filing compliance issues under the Substantial Presence Test, or need a expert assistance preparing tax returns or filing for exemptions, our expat tax professionals have a solution for you.

Expat Tax Compliance Experts

Pure Tax International is a U.S. international tax firm consisting of licensed Tax Attorneys and CPAs with fluid knowledge in expat tax laws, and all matters involving offshore tax reporting. Our foreign tax experts have extensive experience working with U.S. and foreign expats to provide:

Offshore Tax Planning -  Our expat tax attorneys and CPAs can help with expat filing compliance can help setup a proactive foreign tax strategy that maximizes your tax benefits and minimizes your tax liability. This is especially important for expats who have complex tax situations, such as income from multiple sources or investments in foreign countries.

Preparation of U.S. Tax Returns - Our CPAs can also help with the preparation of your expat tax returns in the U.S. They can ensure that your tax return is filed correctly and on time, and that all the required forms and schedules are included. We can also assist with the completion of additional forms, such as the FBAR and FATCA Form 8938. These forms are required to be filed on a yearly basis and can be complex, especially for expats who have foreign bank accounts and assets.

IRS Representation - Most importantly, our expat tax attorneys provide a legal advantage for our expatriate clients. In cases of audits, penalties, or other compliance issues, our international tax attorneys are ABA certified to represent our clients before the IRS, taking on all IRS communications and negotiating offshore or domestic tax settlements.