This publication discusses in general terms some provisions of U.S. federal income tax law that apply to U.S. citizens and resident aliens who live or work abroad and who expect to receive income from foreign sources.
As a U.S. citizen or resident alien, your worldwide income generally is subject to U.S. income tax regardless of where you are living. You are subject to the same income tax return filing requirements that apply to U.S. citizens or resident aliens living in the United States.
However, several income tax benefits might apply if you meet certain requirements while living abroad. You may be able to exclude from your income a limited amount of your foreign earned income. You also may be able either to exclude or to deduct from gross income your housing amount (defined later). To claim these benefits, you must file a tax return and attach Form 2555, Foreign Earned Income. If you are claiming the foreign earned income exclusion only, you may be able to use the shorter Form 2555-EZ, Foreign Earned Income Exclusion, rather than Form 2555.
You may be able to claim a tax credit or an itemized deduction on your U.S. return for the foreign income taxes that you pay. Also, under tax treaties or conventions that the United States has with many foreign countries, you may be able to reduce your foreign tax liability.
Publications 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad; 514, Foreign Tax Credit for Individuals; and 901, U.S. Tax Treaties, discuss in detail the treatment of your foreign income, the foreign tax credit, and the general tax treaty benefits available to you.
See How To Get Tax Help at the end of this publication for information about getting publications and forms.taxmap/pubs/p593-000.htm#en_us_publink1000219312
The U.S. filing requirements for U.S. citizens and resident aliens in foreign countries are generally the same as those for citizens and residents living in the United States.taxmap/pubs/p593-000.htm#en_us_publink1000219313
Your age, filing status, gross income, and whether you can be claimed as a dependent by another taxpayer determine whether you must file a U.S. federal income tax return. To determine if you meet the gross income requirement for filing purposes, you must include all income you receive from foreign sources as well as your U.S. income. This is true even if:
- The income is paid in foreign currency,
- The foreign country imposes an income tax on that income, or
- The income is excludable under the foreign earned income exclusion, discussed later.
You must file a U.S. income tax return if you had $400 or more of net earnings from self-employment, regardless of your age. Net earnings from self-employment include income earned both in a foreign country and in the United States.
Generally, you must pay self-employment tax on your self-employment income even if it is earned in a foreign country and is excludable as foreign earned income in figuring your income tax.taxmap/pubs/p593-000.htm#en_us_publink1000219315
If you had any financial interest in, or signature or other authority over, a bank account, securities account, or other financial account in a foreign country at any time during the tax year, you may have to complete Treasury Department Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts, and file it with the Department of the Treasury at the address listed on the form. You need not file this form if the combined assets in the account(s) are $10,000 or less during the entire year, or if the assets are with a U.S. military banking facility operated by a U.S. financial institution.
You can get Form TD F 90-22.1 from the offices listed at the end of this publication or through the IRS website at www.irs.gov
Under certain conditions, you may have to file a federal estate or gift tax return. For more information, see Publication 950, Introduction to Estate and Gift Taxes. taxmap/pubs/p593-000.htm#en_us_publink1000219317
If your tax year is the calendar year, the due date for filing your income tax return is usually April 15 of the following year. taxmap/pubs/p593-000.htm#en_us_publink1000219318
You are automatically granted an extension to June 15 to file your return and pay any tax due if you are a U.S. citizen or resident alien and on the regular due date of your return:
- You are living outside the United States and Puerto Rico and your main place of business or post of duty is outside the United States and Puerto Rico, or
- You are in military or naval service on duty outside the United States and Puerto Rico.
You must pay interest on any unpaid tax from the regular due date to the date you pay the tax.
You do not have to file a special form to receive this extension. However, you must attach a statement to your tax return explaining what situation qualified you for the extension.
It may benefit you to file for an additional extension of time to file. You may benefit if, on the due date for filing, you have not yet met either the bona fide residence test or the physical presence test, but you expect to qualify after the automatic extension discussed above. To obtain an additional extension, file Form 2350, Application for Extension of Time To File U.S. Income Tax Return, with the: taxmap/pubs/p593-000.htm#en_us_publink1000219319
Department of the Treasury
Internal Revenue Service Center
Austin, TX 73301-0215
Or, you can file Form 2350 with your local IRS representative or other IRS employee. You must file Form 2350 after the close of your tax year but before the end of the first extension. If an additional extension is granted, it will be to a date after you expect to meet the time requirements for the bona fide residence or the physical presence test.
If any of the situations listed below apply to you, you should file your return with the: Department of the Treasury
Internal Revenue Service Center
Austin, TX 73301-0215
- You claim the foreign earned income exclusion.
- You claim the foreign housing exclusion or deduction.
- You live in a foreign country or are a resident, for tax purposes, of a foreign country.
If none of the above situations apply to you, see the instructions for your income tax return.