Do US Citizens Living Abroad Have to Pay Taxes?

If you’re considering living abroad, you may have asked yourself, “Does a U.S. citizen living abroad have to pay taxes?” The simple answer is, yes. Even if you are living out of the country, you still have to file a U.S. federal tax return.

Keep reading to learn more about why and how Americans living abroad still have to pay taxes.

Why Do I Have to Pay Federal Taxes Even If I Live Overseas?

The United States is one of only two countries that imposes citizenship-based taxes. Therefore, as long as you are a U.S. citizen, you still have to pay federal taxes no matter where in the world you live.

What Taxes Do I Pay?

Regardless of where the income is earned, you will still be taxed the same marginal rate as income earned in the states. In other words, if your income qualifies you to pay taxes in the U.S., you will have to pay taxes at the same rate for income earned abroad.

What About State Taxes?

Depending on where you lived in the United States before you moved overseas, you might have to file a state income tax return as well. If you are unsure about whether or not to file a state income return, reach out to an attorney at Easy Estate Probate, and we’ll help guide you.

Can You Avoid Double Taxation?

There are special tax credits, exclusions, deductions, and provisions available to reduce the financial burden of double taxation. Contact us at Easy Estate Probate to discuss your options.