US Citizens Living outside the United States - You Must File !

LIVING OUTSIDE THE UNITED STATES

United States citizens living abroad generally must file a U.S. income tax return each year, even if they may exclude their income pursuant to the Earned Income Exclusion. In fact, timely filing of tax returns ensures that the benefits of the exclusion may be claimed. If you are a U.S. citizen living abroad and have not filed your U.S. income tax returns, you should file the returns immediately.

Failure to file your income tax returns when due may result in a denial of your passport renewal application, together with other penalties imposed by the Internal Revenue Code.

Foreign tax credits are available to persons who find themselves taxable by more than one country on the same income, in cases where the United States has a treaty with the other taxing country in which you reside. Generally, U.S. citizens living abroad in a treaty country may claim a credit based on the taxes paid to the treaty country on all income except income excluded by the Earned Income Exclusion.

Alternative minimum tax is a tax calculated on income without giving regard to certain preference amounts, including the Earned Income Exclusion. As a result of the workings of AMT, and the limitation of the AMT foreign tax credit to 90% of the tax paid to the treaty country, some tax may be payable by you even if a combination of the Earned Income Exclusion and the foreign tax credit would otherwise result in no tax payable.

Click on this link for new IRS filing arrangements for non filers.

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Mark T. Serbinski Certified Public Accountants and Serbinski Partners PC, Chartered Accountants specialize in situations involving the taxation of U.S. citizens living abroad and Canadians living or working in the United States.  Please contact us for a complimentary initial review of your particular situation on a confidential basis.

Last Update: Jul 21, 2008    Copyright ©2007 by Serbinski & Associates, Inc., - ALL RIGHTS RESERVED Unauthorized reproduction prohibited. Although we strive to provide accurate and timely information on this site, the information contained herein deals with complex issues in a concise manner, which may cause unintended results if taken out of context, and is therefore intended for general information purposes only. No action should be taken without obtaining prior legal, accounting or other appropriate professional consultation. To ensure compliance with requirements imposed by the Internal Revenue Service, we inform you that any tax advice contained on this web site was not intended or written to be used, and cannot be used, by the recipient (a) for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions and (b) for the purpose of promoting, marketing, or recommending any tax-related matters addressed within to another party.