Expats that fall within the income threshold and have a Social Security number qualified for the benefits. The deadline to file your U. The deadline for requesting an extension is June You may qualify for the Coronavirus stimulus checks if you fall within the income threshold, have a Social Security number, and file taxes as an expat.
Retired expats and non-filers who live abroad may also qualify. Yes, you still qualify for the stimulus payments if you haven't filed in a few years or owe back taxes. That doesn't mean you'll automatically get it, though— see our expat Coronavirus stimulus check page to get the details. If you need to catch up on prior year returns, you can quickly get started with our Expat Tax Services today. Because the U. These aids include:. Ready to file? Choosing whether to claim the FEIE, FTC, or both will have a substantial impact on the outcome of your tax return, and you should consider all of your options carefully before filing.
Big factors U. Having trouble choosing between the two? To pass, you have to have lived abroad for a certain number of days and have had limited connections with the U.
Tracking your time is essential because you could fail the Physical Presence Test if you're off by even a few hours. To qualify, you must have been in a foreign country for full days out of the year—the "full days" is where U.
If, for example, you're on a hour trans-oceanic flight, those 12 hours may not count toward your full days because you're technically in international airspace.
To qualify as a Bona Fide Resident, for the first year you need to have been living in a foreign country for an entire tax year , which is where many expats get confused.
If you go back to the U. Filing taxes as a U. Ready to file or confused about expat tax forms? This means you are subject to the same income tax rates, and are entitled to the same deductions and credits as any U.
As a result, you may end up owing U. Although expats are subject to U. These are the:. You may not claim both the foreign tax credit and exclusions from income against the same earnings. You have to choose one or the other. Believe it or not, the U. The foreign tax credit is designed to help minimize such double taxation.
It works by giving you a tax credit for all or part of the amount you paid in foreign tax. Only foreign income taxes and excess profits taxes or taxes paid in lieu of such taxes qualify for the credit. Thus, for example, if you've been out shopping for souvenirs or a country estate, you won't get a credit for having paid foreign value-added taxes, sales taxes, or property taxes.
You get a foreign tax credit only on the portion of your U. This is equal to the lesser of:. Instead of taking a credit for foreign income taxes, you can choose to deduct them as an itemized deduction on your Schedule A.
However, it's almost always better to take the credit instead. Only in unusual cases will an itemized deduction for foreign taxes exceed the value of the foreign tax credit. If your income was taxed by a foreign country, you can subtract that tax from your US tax, in most cases substantially reducing your US tax bill. But be careful: you cannot claim a foreign tax credit for foreign taxes on income excluded on Form In other words, you can only claim a foreign tax credit for foreign taxes on the same income that the US is taxing.
The fraction of your foreign taxes that can be taken as a tax credit is determined by the ratio of non-excluded income to total income. Here's an example, using the same figures as above. In this particular example, you would actually be better off by just using the foreign tax credit alone and not even claiming the FEIE. In addition, the foreign tax credit can be applied in some cases against tax on unearned income as well.
So you see that by judiciously combining the FEIE with the foreign tax credit or by applying only the foreign tax credit you can substantially reduce or even get your US tax bill down to zero. Again, this is only an approximate calculation to serve as an example of how the system works.
Be aware that if you have been claiming the FEIE in previous years using Form and you decide this year to use only the foreign tax credit you cannot go back to the FEIE for the next six years unless you receive permission from the IRS.
In some cases, you can exclude qualified housing expenses from your taxable income. This exclusion can be calculated using Part VI on Form There are many other aspects to be considered when figuring your US taxes. Among these are the "Alternative Minimum Tax" AMT ; handling of unearned passive income such as interest and capital gains; the foreign housing exclusion for your lodging; earnings of a non-US spouse; business expenses; the possibility of itemizing deductions instead of applying the standard deduction; state taxes in certain US states where you formerly resided; etc.
If you need to consider any of these elements, you would be well advised to consult an international tax expert, a list of which is provided here. VIDEO Invest in You: Ready. Here are some smart things to do with your tax refund. Andrew Osterland. Need an extension? Amending a return? No matter your situation, you need to file your taxes.
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