Whether you currently live in another country or you moved back to the U.S. after years of living abroad, it is vital to take a look at various issues regarding your taxes. For example, you should realize that all U.S. citizens are subject to IRS laws, even if they work and reside in another country.
Moreover, it is important to understand your options if you have failed to file tax returns while living abroad, and do your best to get caught up.
U.S. citizens living abroad and filing taxes
According to the Internal Revenue Service’s website, every U.S. citizen living and working in another country has to file a tax return with the IRS, even if they file taxes outside of the U.S. as well. That said, many U.S. citizens working in another country qualify for the foreign earned income exclusion.
In fact, many U.S. citizens working in other countries do not have to send any money to the IRS, but they have to file a tax return every year.
Getting caught up on filing taxes for past years
Sometimes, people do not realize that they have to file a tax return even if they live in another country. If you have years of back taxes and you need to get caught up, it is crucial to go over your circumstances carefully. Typically, people have to file tax returns for the last six years, although everyone is in a unique position.
Understanding one’s obligations and taking a careful approach to back taxes (as well as tax obligations for the current year) is critical.