Who has to file U.S. tax returns?
This answer is quite simple.
If you hold US citizenship or a Green Card and your worldwide income is higher than the IRS filing threshold, you need to file a US tax return.
It doesn’t matter:
- where you live in the world
- if you’ve never lived or worked in the United States
- if you hold dual nationality
- if you don’t have any US income or US assets
- if you don’t have a US Social Security Number or US passport.
The US taxation system covers all citizens, no matter where they live. It’s not based on residency like almost every other country.
What is the threshold to file a US tax return?
It changes a little each year, but let’s look at the tax year 2022 to give you an idea.
You’ll need to file a 2022 US tax return when your annual worldwide income exceeds any of these thresholds:
- If you’re single with a total annual income over US$12,950
- If you’re married to an American or a Green Card holder with a joint total annual income over US$25,900
- If you’re married to a non-American and your own total annual income is over US$5
- If you’re Head of Household (Married or Divorced with US dependents) with a total annual income over US$19,400
- If you have any self-employed or freelance income (worldwide) totaling over US$400
Will I have to pay any U.S. tax?
It’s highly unlikely.
Less than 2% of our clients have to pay any US tax.
Most countries have a tax treaty with the United States designed to prevent double-taxation. There are some exceptions to the rule, which differ from one country to the next.
Typically, we have two options when preparing a US tax return. We can take the tax you’ve paid to the country you’re living in and raise a Foreign Tax Credit (FTC) and use that to offset your US tax liability. Most countries have higher income tax rates than the United States so generally speaking, there is always enough FTC to offset your US tax liability.
If you’re living in a country with low or zero income tax, we can use the Foreign Earned Income Exclusion (FEIE). There are some conditions but most US citizens living abroad do qualify for the FEIE. This exclusion allows us to write off your first $107,600 of foreign income. Even if you earn more than that, there are other deductions and exclusions that we may be able to apply to reduce your US tax bill. Beyond this amount and the other exclusions and deductions, you may have to pay US tax on your worldwide income.
How do I catch up?
If you’re just discovering that you should have been filing US tax returns and you’re way behind, you’re not alone.
We help people every day in your situation navigate the US tax minefield and help them become completely US tax compliant, and we make it easy for you.
The IRS (aka the United States tax department) designed a special program for US citizens and Green Card holders living abroad that have found themselves many years behind on their US tax returns.
It’s commonly known as the IRS Streamlined Tax Amnesty program but the official name is the Streamlined Foreign Offshore Filing Procedure.
The program is just for those living overseas that have come to realize they should have been filing US tax returns.
In a nutshell, the special tax amnesty program allows a person to become fully US tax compliant by filing just their last 3 years of overdue tax return, 6 years of Foreign Bank Account Reports (FBAR), and a letter saying they genuinely didn’t know they had to file US tax returns.
Once filed and accepted by the IRS, the person is completely up to date with their US tax returns and the IRS promises not to go back and ask for any prior-year tax returns.
On top of that, the IRS also promises no fines and no penalties for filing your tax returns late.
Your end of the bargain is to promise to file your tax returns in future years, on time.
Who is Andrew J. Landin and why do we have two tax firms?
2023 marks Andrew’s 20th year of expatriate taxes in a career that started with Ernst & Young in London, before relocating to Melbourne and joining PricewaterhouseCoopers. While in Australia, Andrew was a US/ Australian expatriate tax manager focusing on the financial services and oil and gas industries. In 2010, Andrew undertook a secondment to PricewaterhouseCoopers based in the Middle East where his main clients were two of the most prestigious American universities before leaving PricewaterhouseCoopers to establish Expat US Tax in February 2011.
Expat US Tax is a sensibly priced alternative to the “Big-4” accounting firms. It’s a full-service, face-to-face tax advisory and tax preparation provider. It caters to clients that have complex tax situations, require year-round support, and financially benefit from a close ongoing relationship with a highly experienced international tax adviser.
Expat Tax Online “ETO” caters to clients that need a high-quality tax return at a cost-effective price. It’s custom-built software combined with real human decision-making. It’s our tax specialists that decide how the tax return will be best prepared. The software does the grunt work so we can save time and keep fees low.
“I’m really proud of our 100-strong team, I don’t believe in contractors and I don’t believe in outsourcing work to other companies. We have a hand-picked team that really care, go beyond the call of duty and constantly strives for excellence. Our business grows leaps and bounds, year on year and that’s because we all share the philosophy of genuine client care, we treat every client like a VIP, because to us, they are. In the early years, our business was built purely from client referrals and nothing else, frankly, that’s all the work we could handle while maintaining our standards of excellence. In fact, several business units within our company still don’t advertise to this day. ETO was created to serve the US market that we couldn’t compete in at the time. Our main business, Expat US Tax was structured to provide a bespoke, face-to-face service with highly qualified, experienced accountants. That service comes at a cost, and it was a cost some people didn’t get value from because their personal situation simply didn’t require that level of expertise and hand-holding, they needed a solution with a lower cost but one that still provided 5-star service and delivered exactly what they needed.”
The IRS publicly lists licensed tax professionals on their official website.
There is an entire directory that the public can search to make sure they are dealing with a real, licensed tax professional. Use the official IRS link below to check the IRS professional directory, note the website is the official IRS website.
In name field, type in Andrew’s surname “LANDIN”, and in the country field, type in “AUSTRALIA”.
As you will see from Andrew’s Bio, he was in Australia for many years which is why he is listed under Australia on the IRS website.
All our senior accountants are licensed by the IRS and we’d be happy to send you the whole list.
Access the official IRS directory by clicking the button below, and verify us there.