Ask an AI Accountant
A free tool by
Question
If I live abroad, do I owe US income taxes?
AI accountant’s answer:
Yes, U.S. citizens and resident aliens who live abroad are generally subject to U.S. federal income tax on their worldwide income, just like those residing in the United States. However, you may be eligible for certain exclusions and credits that can help offset your U.S. tax liability.
The most common tax benefits for U.S. taxpayers living abroad are:
1. Foreign Earned Income Exclusion (FEIE): You may qualify for the FEIE, which allows you to exclude a certain amount of your foreign earned income from U.S. taxation. For tax year 2022, the maximum exclusion amount is $112,000. To be eligible, you must meet the physical presence test or the bona fide residence test.
2. Foreign Housing Exclusion or Deduction: In addition to the FEIE, you may also qualify for a foreign housing exclusion or deduction if you have qualified housing expenses in a foreign country that exceed a base amount.
3. Foreign Tax Credit: If you pay income tax in a foreign country, you may receive a dollar-for-dollar credit on your U.S. tax return for those taxes, preventing double taxation on the same income.
Keep in mind that these benefits are not automatic, and you must file a U.S. tax return and claim them to receive them. Additionally, filing requirements may vary depending on your income, filing status, and other factors.
Comment from reviewer
Keeper’s AI Accountant
Track and claim every eligible deduction with Keeper
Keeper is the top-rated all-in-one business expense tracker, tax filing service, and personal accountant.