Do US citizens working abroad have to pay taxes to the IRS?

Question

Any information would be helpful. Thank you.

Answer 1

If you are a U.S. citizen working abroad, you may be able to minimize what you owe in U.S. income tax if you qualify for the foreign income exclusion. If you qualify, you may exclude up to $80,000 in foreign income from U.S. income tax liability. If you are married, your spouse is allowed an additional $80,000 exclusion. To qualify, you and your spouse must satisfy the following requirements:

You must reside in a foreign country for an entire tax year or for at least 330 days during a 12-month period
Your salary must be paid by a company or agency in your country of residence or by a U.S. company operating in that country
Also, only earned income--salaries, wages, and fringe benefits, plus allowances and expenses for housing--qualifies for the exclusion. Dividends, interest, capital gains, pension or retirement distributions, and alimony do not qualify. If you are a member of the U.S. military or other government service and are living abroad, your income is not considered foreign income. You'll have to pay taxes as if you were a taxpayer living in the United States.

Even if you avoid U.S. income tax, you will likely pay some form of income tax to the country in which you reside and earn a salary. Should you fail to meet its residency requirements, or if you receive income above the allowable exclusion, you'll probably end up paying both foreign and U.S. income tax. If you do pay foreign income tax, you can apply for a separate U.S. tax credit (using Form 1116) in the amount of foreign income tax you are required to pay.

You'll also owe U.S. Social Security taxes if your country of residence has no treaty to coordinate its social service coverage with the United States. However, if such a treaty is in force, you'll pay foreign social service taxes to your host nation and will not be required to pay U.S. Social Security taxes. In addition, you may be subject to estate and gift taxes if you transfer property, no matter where that property is located. If you maintain a house in the United States, you may owe state income tax and local property tax. For more information, consult a tax advisor or contact the IRS at [phone] or www.irs.gov and request Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad.

Answer 2

As a US citizen, you're required to report a tax return each and every twelve months in spite of in case you reside and paintings foreign places. yet you could offset your US taxes with the taxes which you paid foreign places. to boot, you get a miles better own allowance as quickly as you have been out for a minimum of 330 days. universal, you will no longer pay any further taxed to the US except you reside in a rustic that have not have been given any or very low earnings taxes, together with Dubai.

Answer 3

yes... if you are a US citizen, you are "supposed" to pay taxes.

Per BankRate.com:

Under U.S. tax laws, the worldwide income of any U.S. citizen or resident alien is subject to tax. It doesn't matter if you're living in the United States or overseas, or the money came to you as wages, independent contractor payments, or unearned income from investments, pensions, rents, or royalties. The Internal Revenue Service is due its legal percentage.

Answer 4

Yes, although if the person also paid tax on the earnings to another country, they might be able to take a credit for that against their US income tax.