Working Abroad

Working Abroad As a US Expat

Moving overseas is an exciting time for just about anyone! Not everyone from America is moving to another country retired and they still need a job in order to cover their living expenses, as well as for all their new adventures in this new place they call home. Working abroad is option for many Americans All these changes are quite intriguing, yet there are always things to plan ahead for, especially those pertaining to taxes. Let’s dive into some helpful information regarding your US tax requirements according to the location you have chosen to reside in.

US Expat Taxes for Working Abroad

No matter where you have chosen to live overseas, the United States does require most American citizens and green card holders to file US expat taxes. Whether you are working abroad while living in Italy, South Africa, Singapore, or anywhere else, all worldwide income will have to be calculated and reported in your tax return! Depending on where you are living overseas, you may be required to file for taxes and provide your income for that specific country as well, resulting in “double taxation.” Don’t let this keep you from moving to the country you have always dreamt of. There are ways that could benefit you in this situation. As a US expat, you have the high possibility of being allowed to exclude some of your income you have earned being abroad. Other major exclusions include: 

  • Foreign Tax Credit
  • Foreign Housing Exclusion
  • Foreign Earned Income Exclusion

Location of Income

You might be wondering whether where your income comes from affects any of the previous benefits that were discussed. Lucky for you, the location in which you are provided income does not affect your Foreign Tax Credit or your Foreign Earned Income Exclusions. That is one less thing to worry about! Now, you might be wanting to know how you can apply for the benefits that were mentioned earlier. We will begin with Foreign Tax Credit. In order to qualify for this benefit, you will have to pay more income tax for the country you have resided in compared to the income tax you are expected to pay for the US. On to the next benefit of Foreign Earned Income Exclusion: simply enough, you only need to confirm and prove that you are earning an income from your work, as well as having your tax home location in a country outside of the US. 

Social Security

It has been good news so far that your location of work really does not affect your US income taxes. Now let’s approach a different subject to keep in mind when moving abroad; social security taxes. Thankfully, US expats are still covered by the social security system if they continue to work for a US employer while overseas. However, if US expats are working for a company in a foreign country, you may want to confirm the country’s social security rules. Though many countries have similar coverage like the US, it should be taken into consideration what their social security program will cover specifically. You will definitely want to confirm how your country of choice will cover your foreign income. 

Keep in mind any totalization agreements your country of choice is involved in with the US. You will want to consider whether this agreement will have an affect on you and your benefits. 

Get Help Today!

Are you wondering if you will be expected to pay for “double taxation?” Are you working abroad? Perhaps you are wanting to discover if you qualify for these benefits to make your tax income less?  Here at America Tax Firm we are committed towards helping you in your tax situation. Seek help today from a licensed professional to guide you through US tax abroad