You traveled to Europe and decided to stay—or you have lived abroad for a long time and are happy that way. Whatever your circumstance, if you are a “U.S. person” living abroad, U.S. taxes apply to you too.
Although an odd term, designation as a U.S. person is a reference point for the Internal Revenue Service (IRS). A U.S. person can be a domestic partnership, corporation, non-foreign estate, a trust of a certain type, and the largest category—a “citizen or resident of the United States.”
Although they have U.S. citizenship, expats live all over the world. If you are an expat, you are required to file a tax return in the U.S. if you meet the minimum filing threshold. For a single person under 65, the earning threshold is $14,700 for year-end 2022.
As tax attorneys, our law firm works with businesses and individuals domestic or abroad. For high-wealth taxpayers or those just making their way in the world, getting accurate legal advice on taxes is important. There are deductions and tax credits that can take some of the pain out of paying U.S. taxes, so be sure you understand for which you qualify. Also, there are options to consider if you have significant assets in foreign bank accounts or offshore tax shelters.
Here are some basics to remember when preparing your taxes:
- Timing: If you live outside the U.S. or Puerto Rico, or are serving in the military outside of these areas when your return is due, you have until June 15 each year to file your taxes. You will need to indicate on your return how you qualify for the extension.
- When in Rome: Although you may live full-time in Italy or elsewhere, your U.S. tax figures must be recorded in U.S. dollars and paid the same way. The exchange rate for all tax transactions is that in effect as of December 31 of the record year.
- Hang on, help is on the way: If you need advice or guidance from the Taxpayer Advocate Service (TAS), call +15.15.56.GO.TAS / +184.108.40.206.827. This improved service automatically routes your call to resources in Hawaii or Puerto Rico, instead of plotting your call by Greenwich Mean Time.
- The long goodbye: For some, being an expat is not enough. U.S. taxpayers can choose to relinquish their U.S. citizenship or permanent residency. U.S. persons who gave up their citizenship in 2022 are still required to file a dual-status alien tax return with the appropriate Form 8854 attachment.
When you need help with taxes or offshore accounts, connect with the IRS, the TAS, or an experienced tax attorney to learn your options and ensure your taxes are accurate and timely filed—no matter where in the world you live.
Tax questions or tax controversy? Our tax attorneys can help
From offices in Cleveland and Chicago, our tax group is focused on civil and criminal defense of those pursued by the IRS or who are already facing allegations. When you have tax questions, contact us or call 800-579-0997.