International Tax FAQ

August 28, 2020

If you are a U.S. citizen living overseas, you may have questions about your taxes. Here, review what your Encino tax consultants want you to know about international taxation so you always pay what you owe and subsequently avoid audits among other problems with the IRS. 

Do I Have to File a U.S. Tax Return If I’ve Been Working Abroad?

Whether you are a resident alien or a United States citizen living overseas, you must file a tax return every year. Depending on your work status and living situation, the IRS may provide foreign income tax credits and offer earned income exclusions for money you made abroad. Foreign income tax credits require filing Form 1116 for individuals and Form 1118 for corporations. 

What Do Foreign Earned Income Exclusions Require? 

Foreign earned income exclusions require you to be either: a U.S. citizen or resident alien who has resided in a foreign country or countries for 330 full days during 12 consecutive months, a U.S. citizen and “bona fide” foreign country/countries resident for at least an entire consecutive tax year, or a U.S. resident alien and foreign country citizen/national. For the latter to apply, the foreign country must have an income tax treaty in place with the U.S. and you must have resided in the foreign country for a whole tax year or more. 

What If I Pay Income Taxes in a Foreign Country? Do I Still Owe U.S. Taxes? 

Unless you renounce your U.S. citizenship as per expatriation tax guidelines or file Form I-407 with the U.S. Citizen & Immigration Service to withdraw your green card holder status, you must file U.S. income taxes even if you pay foreign country taxes. 

My Child Was Born Abroad. Can I Claim Them As a Dependant on My U.S. Return? 

For a child within the designated age limits to be claimed as a dependant, they must be a U.S. citizen, U.S. resident alien, U.S. national, or a resident of Mexico or Canada for some of the calendar year. Generally speaking, children are of the same nationality as their parents, even if their parents live overseas or one is a foreign country citizen. 

If you need assistance filing international taxes, contact Wallace & Associates, the accountant service in Los Angeles