International & Expat Tax Laws – Common Questions Overview

Q: As an American who lives abroad, do I need to file a tax return?
A: Yes! All US Citizens and Green Card Holders are required to report on worldwide income to the IRS. This does not mean you will owe taxes as there are a number of tax credits that can reduce Expat tax to zero. Most income must be recognized even if you do not pay taxes to the country of residence.

:: To read more, visit Who is Considered an Expatriate and Should They File U.S. Taxes

Q: As a Non-US Citizen, if I run a business in the US,  such as thru Amazon or anything like that, do I need to pay taxes?
A: Yes, you must file a tax return for all goods and services sold in the US.

Q: As a Non-US Citizen if I need to file a return, how do I apply for a Taxpayer Identification Number (ITIN )?
A: The IRS will issue an ITIN when there is a requirement of filing a return. If you need a ITIN, form W7 must be filed along with the tax return.

Q: I sold my investment property in the US and the closing company withheld a substantial amount of money from my payment to pay IRS, can I get this money back?
A: Yes! You may qualify for a refund. A complete tax return must be filed to include the calculations for the sale. However, this will not guarantee a full refund. In fact, depending on the gain you may actually owe tax. 


Q: If I have not filed My Tax return since I moved, do I owe penalties? 
A: There are “amnesty”  programs available to US citizens who have not filed the returns. The most common is the Offshore Filing Program. To those who choose this filing method, you would need to submit your tax returns for the last 3 delinquent years along with the last 6 delinquent years of FBAR forms. The IRS, requires that the taxpayer continues to file every year thereafter. If a taxpayer does not qualify for the mentioned program, then they may be able to do the Offshore Voluntary Disclosure Initiative (OVDI). As always, you should get help from an experienced tax professional or attorney.


Q: Can I claim my non-resident spouse as a dependent on my tax return?
A: Spouses are not dependents, they are joint return holders for which an ITIN will be required to file.


Q: Do I need to continue to pay social security and medicare taxes to the US In order to be eligible for future benefits? 
A: If you live in a country where there is a Totalization Agreement, the amount you contribute to Social Security will give you a credit with the US Social Administration. If you live in a country where there is no Totalization Agreement, you will not earn credits for payments made to that country’s social security. 

Q: Can I Exclude Income when I Live abroad when filing my return?
A: You may qualify to get the foreign earned income exclusion up to $101,300. To do so you must meet one of the following requirements: 

1. You lived abroad for 330 days within a 365-day window beginning and ending in the tax year. (This does not need to be a calendar year).

2. You were a gonna ride resident of the country you live in, meaning that you live in regular housing in the foreign country. Other considerations include do you pay taxes, and where does your family live?


Q: Will I be doubled taxed on my income, if I file a return in the foreign country and the US?
A: The IRS offers the Foreign Tax Credit. You may be eligible to receive dollar for dollar credit on the US tax, based on taxes paid on the same income.