In the digital age, Americans are increasingly seeking remote jobs—giving them the flexibility to work from anywhere in the world, all from their own laptop. It’s important to understand that if you spend your days writing corporate communications on a beach in Thailand, you may still have U.S. tax filing obligations.
In today’s post, we discuss some of the specific tax benefits and requirements for U.S. tax payers working abroad:
Benefits
- Later filing: If you live broad, you get an automatic filing extension of two months past the regular deadline. If tax days falls on April 15 (which it does most years), then you don’t have to file your return until June 15.
- Foreign Tax Credit:If you’ve paid income taxes to a foreign government, you can get a tax credit for this amount on your U.S. tax return.
- Foreign Earned Income Exclusion: You can exclude income earned abroad up to a certain amount—$103,900 for tax year 2018.
Declarations
As an American abroad, there are certain assets you’re required to declare:
- FBAR: If you have any foreign accounts containing at least $10,000 in total, you must declare these funds on the FinCEN Form 114.
- FATCA: If you have more than $200,000 in foreign assets, you must declare these on Form 8938.
Even under the most straightforward of circumstances, preparing a tax return can be confusing. When complicating factors—such as residing abroad—are added to the equation, the process can become overwhelming. An experienced tax attorney can be a valuable asset to ensure you get your taxes prepared correctly.