Are you a US Citizen or a Green Card holder living outside the US and not sure if you have to file US returns?
The answer is YES, you may have US tax filing responsibilities if you have personal income, for example, wages, salary, commissions, tips, consultancy fees, pension fund, alimony, social security from US or foreign, interest, dividends, capital gains, rental property, farm income, royalties, inheritance or payment in kind in the US or abroad.
As a US person, you are required to report your worldwide income and subject to US taxes regardless of where you reside. Although you may qualify for Foreign Tax Credits or Foreign income Exclusions to avoid double taxation or to minimize tax.
The due date of filing US Federal returns is April 15th of each year but if the due date falls on a weekend or a holiday then the due date is delayed until next business day.
However, if you are a US citizen or resident alien living outside the United States and Puerto Rico you are allowed an automatic 2 months extension till June 15th but any tax due is still on April 15th.
I never filed my US returns after I moved abroad, what can I do now?
You are required to file your US returns and report your worldwide income for any tax year in which your gross income is equal to or greater than the filing threshold for that year. Lot of expats are not aware of this and hence fail to file US taxes, the best option to become complaint is the Streamlined Procedure announced by the IRS. This process is specifically designed for those individual taxpayers who were unaware of US tax filing. Taxpayers who want to participate in this procedure need a vali8d Taxpayer Identification Number often called Social Security Number (SSN) or ITIN.
Social Security Number and ITIN
All tax returns should have either a Social Security Number (for a US citizen or resident) or an ITIN (Individual Tax Identification Number). Taxpayers who are ineligible for an SSN but do not have an ITIN, a submission may be made under the streamlined procedures if accompanied by a complete ITIN application by filing the W-7 form.
The Affordable Care Act
Under this act you are your family are required to have the minimum essential coverage or must qualify for the exemption in order to avoid paying the “individual shared responsibility payment”. Expats may be exempted from ACA, but a US government employee cannot take an exemption from ACA.
Foreign Bank Accounts
Under the Bank Secrecy Act, you are required to report certain foreign financial accounts such as bank accounts, brokerage accounts, retirement accounts like super annuations, Kiwisaver and RESP accounts, mutual funds and Bitcoin accounts. The accounts are reported when the combined balances of all your foreign accounts (accounts outside of the US) at any time of the calendar year were $10,000 or more.
Failure to report F BAR or filing late is subject to civil monetary penalties or criminal penalties.