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U.S. Citizens and Resident Aliens Living Abroad are Subject to Taxation

By Hazel Ickes Subscribe to RSS | December 13th 2011 | Views:

Being a US Citizen is a privilege earned by an individual and being a resident means a lot to any alien entering US. Globalization and Job stays a main reason for many US Citizens and Residents to establish their living temporarily or permanently in other countries. But this may not exempt them from being loyal to US government by paying necessary tax for the development of their kith and kin and also their country.


If you are a U.S. citizen or resident alien, the rules for filing income, estate, and gift tax returns and paying estimated tax are generally the same whether you are in the United States or abroad. Your worldwide income is subject to U.S. income tax, regardless of where you reside. The IRS will continue to look at green card holders as resident aliens until USCIS has revoked the status or the LPR has voluntarily abandoned his/her status. Until then all resident aliens are subject to this taxation.

What determines the taxation?

Your income, filing status and age generally determine whether you need to pay the taxes or not. Generally one need to file a return if he/she meets the income requirement specified in the Filing Requirements of Tax Guide. The sad part of taxation is that sometime US citizen and resident aliens sometimes encounter to pay double or triple taxation as they are supposed to report their gross income regardless of which country they live.

How to Get Relieved from Multiple Taxation?

US Citizens and resident aliens may find relief from multiple taxation by means of

• The Foreign Earned Income Exclusion

• The Foreign Tax Credit

• Tax Treaty Provisions

When to File

If you reside overseas, or are in the military on duty outside the U.S., you are allowed an automatic 2-month extension to file your return until June 15. However, any tax due must be paid by the original return due date (April 15) to avoid interest charges.

If you are unable to file your return by the due date, you can request an additional extension to October 15 by filing Form 4868 before the return due date. However, any payments made after June 15 would be subject to both interest charges and failure to pay penalties.

How to File

• If an employee determines that he/she is eligible to claim the foreign earned income exclusion, an IRS Form 673, Statement For Claiming Benefits Provided by Section 911 of the Internal Revenue Code must be submitted to Tax Services

• IRS Form 673 is valid for one calendar year and must be resubmitted to Tax Services in December of each year for the next calendar year in order for the foreign earned income exclusion to be effective for that next calendar year

• The employee may also submit a U.S. Citizen & Resident Working Abroad State Declaration, if appropriate, to Tax Services for exemption from Massachusetts state income tax withholding and reporting

• An IRS Form W-2 Wage and Tax Statement will be issued to U.S. Citizens and Resident Aliens Working Abroad

The IRS will not impose penalties if no tax is due. However, the terms of your visa require you to comply with all laws of the United States, including the requirement to file an income tax return. You might be required to show proof that you filed if you wish to change your visa status, or obtain permanent residency, or regain entry into the United States once you have left or file US Citizenship Application Form. Don't risk your approval of citizenship application form by failing to comply with this requirement.

Hazel Ickes - About Author:
Citizenship Application Form

US Citizenship Application Form

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