Reasons to file a US Tax Return when my income is under the annual IRS threshold

There are a few reasons why filing a US income tax return is a good idea, even when your income is under the annual thresholds.

  1. You are considering to renounce your US Citizenship. Filing for the previous 5 tax years is an obligation when your income was above the annual thresholds, but is certainly recommended when it was not, to avoid any questions about missing years from the IRS afterwards.
  2. The “Exclusion of Foreign Income” (2555) method was used in your previous tax return(s). You can only file the Form 2555 within 3 years of the due date of the return or you lose the opportunity to claim the Foreign Earned Income Exclusion. If you are compliant and you did not (have to) file for several years you might get a “notice” from the IRS asking about the missing tax return when the 3 year period is over.

Do you have any questions or want to know more? Please contact Americans Overseas or fill out the contact form.

Explanation of the US tax system

  • What is FBAR?

    What is FBAR filing? You may have heard of FBAR filing, but you don’t know what it is. FBAR stands for “Foreign Bank Account Report”, and refers to FinCen Form 114, Report of Foreign Bank and Financial Accounts. Persons required to file a FBAR: US persons wh...

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  • What is FATCA?

    What is FATCA ? FATCA (Foreign Account Tax Compliance Act) is a legislation meant to help counter tax evasion in the US. It forces Financial Institutions worldwide to share information about the financial assets and interests of US citizens. It also indi...

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  • US Tax treaties

    The US is the only developed country in the world where your tax duty is based on citizenship rather than where you live or work. This implies that every US citizen (also those with dual nationality) wherever they are born, based or work, has to file US taxes yearly. Whether this implies a tax payment in the US is strongly dependent on your personal situation. Not filing taxes in the US is con…

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  • How does the US tax its citizens?

    What about taxes in USA? The US is the only developed country in the world where your tax duty is based on citizenship rather than where you live or work. This implies that every US citizen (also those with dual nationality) wherever they are born, based or wo...

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When are you a US person for tax purposes?

US taxes and liability

US taxes owed or not

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Filing tax returns

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