Why do I have to file US tax returns and possibly pay taxes when I don’t live in the US?

2 min

Indeed, as a U.S. citizen, you must file a US tax return and sometimes even pay tax even if you do not live in the United States. We understand that it sounds unreasonable to file a US tax return when you don’t live in the U.S. However, the United States is the only civilized country in the world that has a tax system based on citizenship. This is an exceptional situation. Most countries in the world base their tax system on the country in which you live and or work.

US Tax returns

All US citizens have a US tax and Foreign Bank Account Registration (FBAR) obligation, wherever they live or work in the world. This is governed by the American law FATCA and enforced by intergovernmental agreements between many countries and the US. The tax in the country of residence can be offset against the taxes owed in the US. This means that you almost always have to file taxes but don’t necessarily owe any tax.

We strongly advise you to fulfill your tax obligations. Once you are aware of your obligation, it is compulsory to do so. You could face stiff penalties if you don’t comply.

Questions about your tax liability or US tax return?

Being Americans living abroad ourselves, we learned the hard way about US tax obligation, so we are now here to help you.

Americans Overseas is an independent organization that offers a network of carefully selected tax consultants. The network is regularly updated based on customer feedback. Do need more information? Do not hesitate to contact us if you have any questions.

Read more on your tax obligation, penalties, and interest on the website of the IRS: IRS website

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