There are many reasons why citizens of the United States may leave the beautiful shores of San Diego to live in another country either temporarily or permanently. Employers may have asked them to transfer to a foreign location to satisfy business needs. They may have heard adventure calling or felt like it was time to escape the hustle and bustle of the city.

Whatever the reason for the move, U.S. citizens who live abroad or “expatriates” are still required to file their federal income tax return with the Internal Revenue Service or request an extension.

People living abroad should know a few things about U.S. federal income taxes:

  1. Unless you have renounced your citizenship, you have an obligation to pay taxes.
  2. Although you have an obligation to the government, you do not actually have to file taxes for 2014 unless you earned more than $10,150.
  3. You have to report your income, but you can exclude up to $99,200 of foreign earnings.
  4. The fines for not having insurance under the Affordable Care Act may not apply to you if you moved your tax home out of the U.S.
  5. Foreign Bank and Financial Accounts report (FBAR): Although it applies to foreign accounts, it is not specific to living abroad. Anyone with a balance of more than $10,000 in a foreign account at any point during the past year needs to fill out this form.

These are certainly not all the rules that apply to expats, and even determining what constitutes income can be difficult. Do not rely on this post as legal or tax advice. Get assistance based on your individual circumstances.

Source: The Tico Times, “US taxes are due April 15, 2015,” Zach Dyer, April 13, 2015


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