Frequently Asked Questions

Your Questions Answered

We’ve organized some commonly asked questions to give you more information about U.S. taxes.

If you have a question that you can’t find the answer to, please contact us for help.

Disclaimer:  Due to the fact-sensitive nature of international tax laws, the answers provided in these frequently asked questions (FAQs) is for general education and informational purposes only and is not intended and should not be construed or relied upon as tax advice.

Topics:
General Questions
U.S. Foreign Nationals
U.S. Expatriates

General

The calendar year. Filed Under: General Questions

The Internal Revenue Service. Filed Under: General Questions

Income and social taxes owed on wages are collected through payroll withholding.  Taxes owed on other types of income are required to be paid timely through quarterly estimated tax payments. Filed Under: General Questions
Federal income taxes are collected and enforced by the Internal Revenue Service (IRS);  Social taxes are managed by the Social Security Administration (SSA);  State and local income taxes are enforced by each respective state or local government tax agency. Filed Under: General Questions
The most common tax filings statuses are, generally, Single (unmarried); Married Filing Joint; Married Filing Separately; Head of Household. Filed Under: General Questions
A nine-digit number issued to U.S. citizens, permanent residents and temporary residents who are legally eligible to work in the United States of America.  It is issued by the U.S. Social Security Administration and is the primary number used in the U.S. for identification purposes. Filed Under: General Questions
An ITIN is a nine-digit tax processing number issued by the Internal Revenue Service to help individuals comply with tax laws.  ITINs are issued to individuals who are not eligible for a U.S. Social Security Number. Filed Under: General Questions
Payments of income tax made by individuals on a modified quarterly basis on income that is not subject to tax withholding such as self-employment earnings, interest and dividend income, and capital gains.  These payments help individuals remit the required amount of tax to avoid potential government-assessed penalties. Filed Under: General Questions
FICA is an acronym for the Federal Insurance Contributions Act of the Unites States of America.  The FICA tax is the payroll tax that funds the primary social benefits in the U.S.  It consists of two components – social security, and Medicare. Filed Under: General Questions
A 3.8% federal income surtax tax that is owed in addition to regular federal income tax on net investment income when income exceeds a threshold amount for a given filing status. Filed Under: General Questions
A .9% federal social surtax that is owed in addition to regular Medicare tax.  It applies only to taxpayers who earn over a certain income level each tax year. Filed Under: General Questions
Yes, at the federal level, the U.S. has an estate tax which is a tax on a person’s right to transfer property upon death.  The tax is levied against the assets of person’s final estate prior to those assets being transferred to beneficiaries.  Several U.S. states also have an estate or inheritance tax. Filed Under: General Questions
Yes.  Some gifts may be excluded from the gift tax but many are taxable.  The gift tax is typically payable by the donor not the recipient of a gift. Filed Under: General Questions
Generally, yes.  The tax withheld from wages is not the final amount of tax owed.  Your final tax can only be determined by filing a properly prepared income tax return.  And because rules can differ between federal, state, and local and state tax agencies, a person may be required to file more than one tax return. Filed Under: General Questions
Generally, yes.  The location of a person’s employer or the payroll does not determine if a person is subject to U.S. taxes.  Instead, taxation is typically determined by where a person physically works on a given day.  Bi-lateral income tax treaties can override the U.S. federal laws but typically not state tax laws. Filed Under: General Questions
Educate yourself on the U.S. tax system, provide your information to your professional accountant in an organized manner, translate tax documentation into English, provide all your tax information together (not piecemeal), respond promptly to questions raised by your tax professional and schedule a time up-front to review your tax information with your accountant. Filed Under: General Questions
Most individual income tax returns are eligible to be electronically filed with tax authorities. One exception to e-filing is federal-level, dual-status income tax returns. This special type of income tax return must be printed, properly assembled, and then mailed to the Internal Revenue Service. Filed Under: General Questions
The due date for filing an annual individual income tax return and paying all tax owed is normally April 15.  Extensions of time to file an annual income tax return are commonly granted by federal and state tax authorities.  However, an extension to file an income tax return does not extend the due date for paying all tax owed. Filed Under: General Questions
The most common method is to file Form 8822, Change of Address with the IRS.  A U.S. state may accept the IRS form or have its own version of the form. Filed Under: General Questions
Visit the website of the IRS or state from which you are expecting the refund.  These tax agencies typically have an area on their websites that allow a taxpayer to check the status of their refund. Filed Under: General Questions
This is an official form provided by your employer each year that summarizes your earnings and taxes withheld for each tax authority. The information on Form W-2 is used to prepare an individual’s annual income tax returns. Filed Under: General Questions
Form 1099 is used to report non-employment income to the Internal Revenue Service (IRS). Businesses (e.g., banks, brokerage firms, companies) are typically required to issue a Form 1099 form to a taxpayer who has received a certain amount of non-employment income during a tax year. Different types of payments are reported on different versions of Form 1099. For example, interest income received is typically reported on Form 1099-INT whereas dividend income received is reported on Form 1099-DIV. Filed Under: General Questions
In general, a person may either claim allowable itemized deductions or a standard deduction amount, whichever is higher.  Rules differ for federal and state income tax purposes. Filed Under: General Questions
Itemized deductions include things like state income taxes, mortgage interest and charitable contributions. Filed Under: General Questions
The standard deduction is a flat amount that a person may deduct from their annual income when computing the amount of income subject to taxation.  The amount of deduction is determined by one’s filing status and typically differs for federal and state income tax purposes. Filed Under: General Questions
In general, the IRS currently treats cryptocurrencies as “property” rather than currencies.  This means they are treated like a traditional investment such as stock.  Selling at a profit triggers capital gains tax, while selling at a loss may allow you to take a capital loss. Filed Under: General Questions
Taxable income represents the reportable gross income less allowable adjustments and deductions.  Examples of gross income include wages, interest income, dividend income, rental property income, capital gains, severance pay, gambling winnings, pension payments, etc. Filed Under: General Questions
Tax-loss harvesting allows you to sell investments (e.g., stocks) that have decreased in value since you acquired them, replace them with reasonably similar investments, and then offset realized investment gains with those losses. The result is that less of your money goes to taxes and more may stay invested and working for you. Filed Under: General Questions
The United States has income tax treaties with several foreign countries.  The primary purpose of these treaties is to resolve tax issues that frequently arise when a person generates income that is subject to taxation in more than one country.  Income tax treaties typically do not apply to U.S. state level taxation. Filed Under: General Questions
You must contact the tax agency that issued the original refund check to determine the specific process required to obtain a new refund check. Filed Under: General Questions
For U.S. federal income tax purposes, the due dates are:  April 15, June 15, September 15, and January 15 of the following year.  Most U.S. states follow these same payment dates but you should check state law to be certain. Filed Under: General Questions
The Report of Foreign Bank and Financial Accounts – commonly known as an FBAR – is a required disclosure form on which U.S. persons report foreign financial accounts they have a financial interest in or signature/other authority over which are maintained with financial institutions located outside of the U.S.  The FBAR is authorized under the Bank Secrecy Act and is jointly administered by the U.S. Financial Crimes Enforcement Network (FinCEN) and Internal Revenue Service (IRS), bureaus within the U.S. Department of the Treasury. Filed Under: General Questions
The FBAR is used by the U.S. government to identify persons who may be using foreign financial accounts to circumvent U.S. law. FBAR information can help identify or trace funds used for illicit purposes or identify unreported income maintained or generated abroad. Filed Under: General Questions
A U.S. person, including a citizen, resident, corporation, partnership, limited liability company, trust, and estate, must file an FBAR to report:
  1. a financial interest in or signature or other authority over at least one financial account located outside the United States if
  2. the aggregate value of those foreign financial accounts exceeded $10,000 at any time during the calendar year reported.
Filed Under: General Questions
Generally, an account at a financial institution located outside the United States is a foreign financial account. However, there are many exceptions to reporting requirements.  Whether the account produced taxable income has no effect on whether the account is a foreign financial account for FBAR purposes. Filed Under: General Questions
Annually. Filed Under: General Questions
An FBAR is due no later than April 15th for the prior calendar year. An automatic extension to October 15 is allowed if a person fails to file by the original April 15th filing due date. Filed Under: General Questions
An FBAR must be filed electronically (i.e., no paper filing allowed) through FinCEN’s BSA E-Filing System.  An FBAR is not filed with a person’s annual individual federal income tax return but FBAR-related questions on federal tax returns (e.g., Schedule B) must be properly completed. Filed Under: General Questions
Yes.  A person may be subject to substantial civil monetary penalties and/or criminal penalties for FBAR reporting and/or recordkeeping violations. Filed Under: General Questions
Form 8938, Statement of Specified Foreign Financial Assets, is a form that is filed with an individual’s federal income tax return each year when required.  The Form 8938 is used to report specified foreign financial assets if the total value of all the specified foreign financial assets in which an individual has an interest is more than the appropriate reporting threshold. Filed Under: General Questions
No.  Form 8938 is an IRS disclosure form that is filed with an individual’s annual income tax return.  The FBAR is a separate filing governed by the U.S. Department of Treasury Financial Crimes Enforcement Network (FinCEN) agency.  Filing one of these forms does not relieve an individual from the requirement to file the other form when required to do so under the filing requirements. Filed Under: General Questions
If the mistake requires correcting, then file an amended income tax return.  For federal tax purposes, use Form 1040-X, Amended U.S. Individual Income Tax Return.  U.S. states have similar forms that should be used. Filed Under: General Questions
Generally, yes.  This type of income is considered self-employment income.  The net income from the business is calculated on Schedule C which is attached to your federal income tax return.  The net taxable income would be subject to both income taxes and the federal self-employment tax. Filed Under: General Questions
If by the end of February, your Form W-2, Wage and Tax Statement has not been corrected by your employer after you attempted to have your employer or payer issue a corrected form, you must contact the IRS and request that an IRS representative initiate a Form W-2 complaint. Filed Under: General Questions
The net income an individual earns from the operation of his or her own business or an individual’s distributive share of partnership income. Filed Under: General Questions
Yes.  However, certain expenses attributable to the rental of the property are deductible when determining the amount of income subject to U.S. taxation. Filed Under: General Questions
Yes.  These types of payments should be captured and reported as taxable earnings on Form W-2. Filed Under: General Questions
The Internal Revenue Service has no official exchange rate.  Generally, it accepts any posted exchange rate that is used consistently.  If you have a single transaction, such as the sale of a business that occurred on a single day, use the exchange rate for that day.  However, if you receive income evenly throughout the tax year, you may translate the foreign currency to U.S. dollars using the yearly average currency exchange rate for the tax year. Filed Under: General Questions
U.S. tax authorities use your last known address – as reported to them by you – when they attempt to contact you.  Failure to provide your current address to tax authorities does not relieve you of any tax-related responsibilities.  Therefore, you should use your current home address on your income tax return.  If you relocate and need to update your address on file with the IRS, you may do so using Form 8822, Change of Address.  U.S. state tax authorities either honor IRS Form 8822 or have their own form. Filed Under: General Questions
The IRS typically processes electronically filed tax returns, and issues refunds in 3-4 weeks for most taxpayers.  For tax returns filed in paper form, processing can take 8 weeks or longer.  Processing an amended income tax return can take up to a year.  State tax agencies frequently process all types of tax returns much quicker than the IRS. Filed Under: General Questions
If you do not have, and are not eligible for, a U.S. Social Security Number, then you will need to obtain an Individual Taxpayer Identification Number (ITIN). An ITIN is a 9-digit tax processing number issued to individuals by the Internal Revenue Service. Filed Under: General Questions
Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding, is an IRS tax document used to report income paid to foreign individuals or entities, such as fellowships, scholarships, royalties, or wages exempt under a tax treaty. It is distributed by March 15 to nonresidents to report income and tax withheld. Filed Under: General Questions
Yes, it is highly recommended to maintain at least one U.S. bank account when relocating abroad to manage remaining U.S.-based expenses (e.g., taxes, student loans, subscriptions, etc.), facilitate easy money transfers, retain high-value credit card rewards, and avoid the difficulty of reopening accounts later. Your bank will most likely require a U.S. address be listed on your account profile. Using a trusted friend or family member’s address is common practice to avoid triggering restrictive policies. Filed Under: General Questions
As of late 2025 and moving into 2026, the IRS is phasing out paper checks for both payments and refunds, heavily prioritizing electronic methods (direct deposit/EFTPS) for security and speed. While electronic payment is required for most, paper checks may still be accepted in limited, specific circumstances.

To avoid delays and potential security risks, the IRS strongly advises using electronic payment methods whenever possible. Filed Under: General Questions
No, the IRS will not directly deposit your tax refund into a foreign bank account. Direct deposit is only available for accounts held at U.S. financial institutions. If you do not have a U.S. account, the IRS will mail a paper check to your address, which can take six or more weeks. The refund will be denominated in U.S. dollars, which may make it hard to cash in another country.

Alternatives: Use a U.S. virtual bank account, or a foreign bank that provides a U.S. routing number for international transfers. Filed Under: General Questions
U.S. citizens living abroad can pay taxes via IRS Direct Pay (or similar state tax agency payment site) using a U.S. bank account, a credit/debit card, or international wire transfer. The IRS does not accept direct payments from foreign bank accounts. Filed Under: General Questions
Yes, it is possible to pay your taxes using someone else’s bank account, provided you have their permission and the bank allows the transaction. The easiest methods are paying via the IRS website using their account details.

Alternative: You can mail the payment voucher and a physical check (e.g., a cashier’s check from a U.S. bank, a personal check from the other person’s U.S. account, etc.) to the tax authority. If a paper check is mailed, make sure the check list your name and Social Security/ITIN number on it so that the tax agency properly attributes the payment to you. Filed Under: General Questions
No, you should not have your U.S. income tax refund directly deposited into someone else’s bank account. According to IRS guidelines, the account must be in your own name, your spouse’s name (for joint returns), or both. Using an account in another person’s name frequently causes the bank to reject the deposit, leading to significant delays while the IRS mails a paper check instead.

Alternatives: Use a U.S. virtual bank account, or a foreign bank that provides a U.S. routing number for international transfers. Filed Under: General Questions
Yes, you typically can have your U.S. income tax refund deposited into a virtual U.S. bank account, digital wallet, or prepaid card, provided it has a valid U.S. routing and account number and is in your name.

Ensure the account accepts ACH deposits from the U.S. Treasury, otherwise the refund deposit will be rejected, and the IRS will, instead, mail a paper check to you at the address listed in your IRS records. Filed Under: General Questions
In general, leaving U.S. retirement funds (i.e., 401(k) or IRA) invested in the U.S. generally maintains tax-deferred growth, but withdrawals are subject to U.S. income tax. If you are under age 59½ at the time funds are withdrawn, a 10% early distribution penalty will typically apply in addition to the income tax owed. Nonresident status taxpayers generally face a 30% withholding tax on distributions unless an income tax treaty reduces it. Depending on your last state of residency, you may also owe state-level income tax on distributions. Filed Under: General Questions
To claim your child as your dependent, your child must meet either the qualifying child test or the qualifying relative test:
  • To meet the qualifying child test, your child must be younger than you or your spouse if filing jointly, and either younger than 19 years old or be a “student” younger than 24 years old as of the end of the calendar year.
  • There is no age limit if your child is “permanently and totally disabled” or meets the qualifying relative test.

In addition to meeting the qualifying child or qualifying relative test, you can claim that person as a dependent only if these three tests are met:
  1. Dependent taxpayer test
  2. Citizen or resident test, and
  3. Joint return test
Filed Under: General Questions
A cashier’s check is a secure payment method guaranteed by a bank or credit union, rather than an individual’s account. The institution issuing the check uses its own funds for the payment, with money upfront deducted from the purchaser’s account. It is used for large transactions like buying a car or a house to ensure funds are available and the check will not bounce. Filed Under: General Questions
Cashier’s checks are bank-issued, high-limit, and secure, ideal for large payments like real estate. Money orders are prepaid, low-limit ($1,000 cap), and widely available at places like post offices, making them better for small, secure payments. Cashier’s checks typically cost more ($10–$15) than money orders ($1–$5). Filed Under: General Questions

U.S. Foreign Nationals

An individual who is neither a U.S. citizen or U.S. national. Filed under: U.S. Foreign Nationals

An individual who is neither a U.S. citizen or U.S. national. Filed under: U.S. Foreign Nationals

A U.S. tax nonresident alien is a person who is not a resident alien. Filed under: U.S. Foreign Nationals

A U.S. tax resident alien is a person who has been lawfully admitted as a permanent resident of the U.S. (i.e., a green card holder) or meets the Substantial Presence Test.  Certain special elections, if properly made, can also result in a person being treated as resident alien for U.S. federal tax purposes. Filed under: U.S. Foreign Nationals

Dual-status aliens are individual taxpayers who have been both a U.S. tax resident and a nonresident during the same tax year.  As a result, different federal tax laws apply to their resident and nonresident periods.  Dual status does not refer to a person’s citizenship, only to one’s resident status for U.S. federal income tax purposes.  Dual-status alien status is most common in a person’s year of arrival or departure from the U.S. Filed under: U.S. Foreign Nationals

In general, nonresident aliens are required to declare and pay federal income tax on their U.S. source income.  U.S. source income typically includes effectively connected income (ECI) and FDAP (fixed or determinable, annual, or periodic) income. Filed under: U.S. Foreign Nationals

Effectively Connected Income is all U.S. source income connected with the conduct of a U.S. trade or business.  The performance of personal services by an individual within the U.S. is usually considered engagement in a U.S. trade or business.  Whether you are engaged in a trade or business in the U.S. depends on the nature of your activities.  Deductions are permitted against ECI and nonresident aliens pay income tax on ECI at graduated tax rates or lower rate allowed under an applicable tax treaty. Filed under: U.S. Foreign Nationals

FDAP is an acronym for fixed or determinable, annual, or periodic.  It is passive income such as interest, dividends, rents, or royalties.  FDAP income that is effectively connected to a U.S. trade or business is taxed at normal graduated tax rates.  FDAP income that is not effectively connected is taxed at a flat 30% rate. Filed under: U.S. Foreign Nationals

Form 1040NR, U.S. Nonresident Alien Income Tax Return. Filed under: U.S. Foreign Nationals

U.S. resident aliens are generally taxed like U.S. citizens.  This means they must declare their worldwide income on their annual U.S. individual income tax return, regardless of where the resident alien lives or where the income is earned, paid, or delivered. Filed under: U.S. Foreign Nationals

Form 1040, U.S. Individual Income Tax Return. Filed under: U.S. Foreign Nationals

No.  Everyone’s U.S. federal tax income tax status is determined separately. Filed under: U.S. Foreign Nationals

Typically, no.  While you are required to report the non-U.S. source income on your U.S. income tax return, in most cases you would be allowed to claim a credit against the U.S. federal income tax for the income tax paid to the other country.  The credit, if claimed, may not exceed the amount of U.S. tax owed on the income. Filed under: U.S. Foreign Nationals

Because dual-status aliens have both resident and nonresident periods within the same tax year, they generally file a form 1040 if they are a tax resident at the end of the tax year and Form 1040NR if they are a tax nonresident at the end of the year.  In addition, dual-status aliens must attach a statement to their income tax return that details their taxable income during the other portion of the year. Filed under: U.S. Foreign Nationals

If you are any of the following, you must file an income tax return:

  1. A nonresident alien individual engaged or considered to be engaged in a trade or business in the U.S. during the year.
  2. A nonresident alien individual who is not engaged in a trade or business in the United States and has U.S. income on which the tax liability was not satisfied by the withholding of tax at the source.
  3. A representative or agent responsible for filing the return of an individual described in (1) or (2),
  4. A fiduciary for a nonresident alien estate or trust, or
  5. A resident or domestic fiduciary, or other person, charged with the care of the person or property of a nonresident individual may be required to file an income tax return for that individual and pay the tax (Refer to Treas. Reg. 1.6012-3(b)).
  6. A nonresident alien student, teacher, or trainee who was temporarily present in the United States on an “F,””J,””M,” or “Q” visa, you are considered engaged in a trade or business in the United States. Therefore, you are typically required to file an income tax return (e.g., Form 1040-NR) if you have income subject to tax, such as wages, tips, scholarship and fellowship grants, dividends, etc.
  7. A nonresident alien who desires to claim:
    1. A refund of over withheld or overpaid tax, or
    2. The benefit of any deductions or credits. For example, if you have no U.S. business activities but have income from real property that you choose to treat as effectively connected income, you must timely file a true and accurate return to take any allowable deductions against that income.

Filed under: U.S. Foreign Nationals

Generally, no.  U.S. income tax withholding rules can be different from the income tax rules. Filed under: U.S. Foreign Nationals

A certificate of compliance – commonly known as a sailing permit – is a document signed by the IRS which acknowledges an alien individual has satisfied his or her U.S. federal tax obligation prior to leaving the U.S. based on information available at that time.  Obtaining a sailing permit typically requires completion of either Form 1040-C, U.S. Departing Alien Income Tax Return or Form 2063, U.S. Departing Alien Income Tax Statement. Filed under: U.S. Foreign Nationals

Whenever an alien status taxpayer departs the U.S.  However, if an individual provides the IRS with information showing, to the satisfaction of the IRS, that he or she intends to return to the United States and that the departure does not jeopardize the collection of income tax, the individual can get a sailing or departure permit by filing Form 1040-C without having to pay the tax shown on it if all required income tax returns have been filed and all tax owed has been fully paid. Filed under: U.S. Foreign Nationals

A person must visit an IRS office in person and file either Form 1040-C or Form 2063, along with other supporting documents, at least 2 weeks – but no more than 30 days – prior to leaving the U.S. Any additional tax owed for the current or prior year(s) must either be paid or bond guaranteed to obtain a sailing permit. Once approved, the IRS will provide the individual a sailing or departure permit. Filed under: U.S. Foreign Nationals

Yes.  If an income tax return is required by law, that return must be filed even though Form 1040-C has already been filed.  The tax paid with Form 1040-C, if any, should be taken as a credit against the tax liability for the entire tax year on an individual’s annual U.S. income tax return. Filed under: U.S. Foreign Nationals

No.  Nonresident aliens may only claim certain allowable itemized deductions, and only if they have effectively connected income. Filed under: U.S. Foreign Nationals

No.  Dual-status aliens may only claim certain allowable itemized deductions. Filed under: U.S. Foreign Nationals

Generally, a married individual cannot file a joint income tax return using the married filing jointly status if either spouse was a nonresident alien at any time during the tax year. However, nonresident aliens married to U.S. citizens or residents may elect to be treated as U.S. residents and file joint tax returns. Filed under: U.S. Foreign Nationals

A social security number (SSN) must be furnished on income tax returns, statements, and other tax-related documents. If your spouse and/or children do not have – and are not eligible to get – an SSN, they must apply for an individual taxpayer identification number (ITIN) to be included on an income tax return. Filed under: U.S. Foreign Nationals

Yes.  Publication 519, U.S. Tax Guide for Aliens. Filed under: U.S. Foreign Nationals

U.S. Expatriates

An amount of foreign sourced earned income that certain qualifying U.S. citizens and resident aliens may exclude from U.S. taxable income. Filed under: U.S. Expatriates
Generally, foreign sourced earned income is income received for services performed in a foreign country. Filed under: U.S. Expatriates

One of 2 potential tests a U.S. citizen and certain U.S. tax resident aliens can meet to qualify for the foreign earned income exclusion, the foreign housing exclusion, and/or the foreign housing deduction.  The other test is the physical present test.  An individual meets the bona fide residence test if he or she is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year (e.g., January 1 through December 31).  The bona fide residence test is a subjective test based on a person’s specific facts and circumstances. Filed under: U.S. Expatriates

One of 2 potential tests an individual can meet to qualify for the foreign earned income exclusion, the foreign housing exclusion, and/or the foreign housing deduction.  The other test is the bona fide residence test.  In general, an individual meets the physical presence test if he or she is physically present in a foreign country or countries 330 full days during any period of 12 consecutive months including some part of the year at issue.  The 330 qualifying days do not have to be consecutive.  The physical presence test is available to both U.S. citizens and U.S. residents within the meaning of Internal Revenue Code section 7701(b)(1)(A) and is based only on how long an individual stays in a foreign country or countries.  Unlike the bona fide residence test, this test does not depend on the kind of residence established, an individual’s intentions about returning to the United States, or the nature and purpose of the stay abroad. Filed under: U.S. Expatriates

In addition to the foreign earned income exclusion, an individual may also claim an exclusion or a deduction from gross income for a portion of foreign housing costs incurred. To claim the foreign housing exclusion or deduction, an individual’s tax home must be in a foreign country and he or she must meet either the bona fide residence test or the physical presence test. The foreign housing exclusion applies only to amounts considered paid for with employer-provided amounts, which includes any amounts paid to you or paid or incurred on your behalf by your employer that are taxable foreign earned income to you for the year (without regard to the foreign earned income exclusion). The housing deduction applies only to amounts paid for with self-employment earnings. Filed under: U.S. Expatriates

Form 2555, Foreign Earned Income. Filed under: U.S. Expatriates

Yes, if you are a U.S. citizen or a resident alien living outside the United States, your worldwide income remains subject to U.S. income tax. However, you may qualify for certain exclusions and/or foreign tax credits that can reduce the amount of tax you owe. Filed under: U.S. Expatriates
An international social security agreement is commonly referred to as a “totalization agreement”. An international social security agreement is a bi-lateral agreement executed between two countries that is designed to eliminate dual social security coverage and taxation of the same work. These agreements also provide benefit protection to persons with careers divided between the United States and a foreign country. Filed under: U.S. Expatriates

An official document that contains the details and limitations of an employee covered by an international social security agreement.  It is issued by the social security agency of the country where the employee will continue social security coverage. Filed under: U.S. Expatriates

Employers generally are required to request such certificates on behalf of employees they have transferred abroad.  Self-employed persons request their own certificate. Filed under: U.S. Expatriates

Form 2350 is a special type of IRS extension request filed by U.S. citizens and resident aliens who reside outside of the U.S. The form is used to request an extension of time to file an annual individual federal income tax return when the taxpayer expects to file Form 2555 or 2555-EZ and needs additional time to meet either the bona fide residence test or the physical presence test to qualify for the foreign earned income exclusion and/or the foreign housing exclusion or deduction. Filed under: U.S. Expatriates

If you are a U.S. citizen or resident alien residing overseas on the regular due date of your return, you are allowed an automatic 2-month extension to file your tax return without requesting an extension.  If you use a calendar year, the regular due date of your return is April 15, and the automatic extended due date would be June 15.  If the due date falls on a Saturday, Sunday, or legal holiday, the due date is delayed until the next business day. Filed under: U.S. Expatriates

No.  All tax owed must be paid by the original due date of April 15 even if you are eligible for the automatic 2-month extension of time to file your annual income tax return. Filed under: U.S. Expatriates

A full day is a period of 24 consecutive hours, beginning and ending at midnight.  An individual must spend the full day in a foreign country or countries for the day to be counted.  When you leave the U.S. to travel to a foreign country or when you return to the U.S. from a foreign country, the time you spend on or over international waters does not count as time in a foreign country. Filed under: U.S. Expatriates

Generally, a person may claim either a credit or deduction for income taxes paid to a foreign country or U.S. territory.  Taken as a deduction, foreign income taxes reduce your taxable income. Taken as a credit, foreign income taxes reduce your tax liability. Filed under: U.S. Expatriates

Generally, income taxes you pay to a foreign country or U.S. territory.  The foreign income tax for which an individual may claim a credit or deduction is the amount of legal and actual tax liability paid or accrued for a tax year.  Social taxes and wealth taxes generally do not qualify as income taxes and, therefore, are not eligible to be claimed as a tax credit. Filed under: U.S. Expatriates

Yes.  The lowest allowed federal income tax may result from claiming the foreign earned income exclusion, foreign tax credit or the combination of both. Filed under: U.S. Expatriates

No.  Foreign income taxes allocable to the excluded part of income are not eligible to be claimed as a tax credit or deduction. Filed under: U.S. Expatriates

Only earned income that is attributable to the performance of personal services abroad.  Investment income is not earned income for purposes of the foreign earned income exclusion. Filed under: U.S. Expatriates

Yes.  These amounts whether paid directly or indirectly to you represent taxable compensation for services performed. Filed under: U.S. Expatriates

If the services to which the salary relates are performed outside of the United States, then the salary is considered earned abroad (i.e., foreign earned income).  The location of an individual’s employer or bank account does not matter when determining the source of earned income. Filed under: U.S. Expatriates

Any territory under the sovereignty of a country other than the United States is a foreign country.  U.S. territories are not treated as foreign countries. Filed under: U.S. Expatriates

Benefits received by U.S. citizens and resident aliens may be taxable, depending on the total amount of income and the filing status of the taxpayer.  Under certain treaties, U.S. social security benefits are exempt from U.S. tax if taxed by the country of residence. Filed under: U.S. Expatriates

Yes.  The employee would need to properly complete Form 673, Statement for Claiming Exemption from Withholding on Foreign Earned Income Eligible for the Exclusion(s) Provided by Section 911 and provide it to the employer. Filed under: U.S. Expatriates

File Form W-9, Request for Taxpayer Identification Number and Certification (indicating you are a U.S. citizen) with each withholding agent who is paying you dividends and interest.  This form is their authority to stop withholding the 30% income tax at the source on payments owed to you. Filed under: U.S. Expatriates

Yes.  Publication 54, Tax Guide for U.S. Citizens and Residents Abroad. Filed under: U.S. Expatriates

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