Many Americans living overseas are busy with everyday expat life. Making time for expat adventures in your new country is part of the experience. Perhaps you have immersed yourself or family in learning a new language, culture, and indulging in traditional foods. As a US citizen or resident alien, the IRS requires you to uphold your tax filing obligation. Yes, many US expats do not realize that when you relocate overseas the IRS still requires you to file US taxes. Many US expatriates find expat tax returns to be a lot more complex. Independence Expat Tax, Certified Public Accountants, CPAs are experts with expat taxes.
As you know Americans Living Abroad do need to file a US Tax Return if you fall within a specific level. What you may not be aware of is that as a US expat living abroad there is a possibility of being double taxed. That’s right! Understanding Totalization Agreements, the countries that participate, and the benefits it might have for you are important when filing taxes overseas.
The United States has established Totalization Agreements, with several nations to avoid double taxation of income about social security taxes. Wow! That’s great news! When you file your US expat income taxes these agreements must be considered when deciding if a Green Cardholder is subject to U.S. Social Security/Medicare tax. A U.S. citizen or resident alien might be subject to the social security taxes of a foreign country. US expatriates that qualify may not have to pay self-employment taxes.
The United States has a Totalization Agreement with over 26 countries. Here is a current list from the IRS website:
“Australia, Austria, Belgium, Canada, Chile, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Japan, Luxembourg, Netherlands, Norway, Poland, Portugal, Slovak Republic,South Korea, Spain, Sweden, Switzerland, and the United Kingdom.”
Conclusion
Many countries participate in Totalization Agreements with the United States. Which helps to prevent double taxation for US Green Cardholders and US Citizens living abroad. Understanding how this agreement could affect your tax situation is important. Tax rules for expats can be more detailed. Discuss your tax income situation with Independence Expat Tax, Certified
Public Accountants, CPA. Schedule your tax consultation today!