Aron Govil- US expats: frequently asked questions about taxes

Are you an American expat wondering about your tax obligations? You’re not alone says Aron Govil.

This article will answer some of the most common questions that ex-pats have about their US taxes.

FAQs:

1. Do I need to file a tax return if I’m living abroad?
2. What tax breaks am I entitled to as an expat?
3. How do I report my foreign income?
4. Can I still claim a home mortgage interest deduction?
5. What is the Foreign Earned Income Exclusion?
6. What is the Foreign Tax Credit?
7. How do I handle estate and gift taxes as an expat?
8. Are there any other special considerations for American expats when it comes to taxes?

1. Do I need to file a tax return if I’m living abroad?

You are generally required to file a tax return if you earn income in the United States, regardless of where you reside. However, there are some exceptions to this rule. If you meet any of the following criteria, you may not need to file a tax return:

• Your income is below the minimum filing requirement
• You are claimed as a dependent on someone else’s tax return
• You do not have to file a tax return because you live outside the US and your income is from foreign sources only

2. What tax breaks am I entitled to as an expat?

There are a number of tax breaks available to American expats. The most common include the Foreign Earned Income Exclusion and the Foreign Tax Credit.

The Foreign Earned Income Exclusion allows you to exclude a certain amount of your foreign income from US taxation. The Foreign Tax Credit allows you to claim a tax credit for taxes you have paid to a foreign country explains Aron Govil.

There are also several deductions and credits available for taxpayers who itemize their deductions. These include the home mortgage interest deduction, the deduction for state and local taxes, and the child and dependent care credit.

3. How do I report my foreign income?

Report your foreign income on Form 1040, line 21. If you are claiming the Foreign Earned Income Exclusion or the Foreign Tax Credit, you will need to complete Form 2555 or Form 2555-EZ.

4. Can I still claim a home mortgage interest deduction?

Yes, you can still claim a home mortgage interest deduction if you are an American expat. To qualify, your loan must be used to purchase or build your primary home. You can only deduct the interest on up to $750,000 of debt.

5. What is the Foreign Earned Income Exclusion?

The Foreign Earned Income Exclusion allows taxpayers to exclude a certain amount of their foreign income from US taxation. The amount of the exclusion varies depending on your income level and filing status.

6. What is the Foreign Tax Credit?

The Foreign Tax Credit allows taxpayers to claim a tax credit for taxes they have paid to a foreign country. The credit is available for both income and estate taxes.

7. How do I handle estate and gift taxes as an expat?

American expats are subject to US estate and gift taxes on assets they own in the United States says Aron Govil. There is a special exemption available for gifts and bequests to spouses and charity.

8. Are there any other special considerations for American expats when it comes to taxes?

Yes, there are several other special considerations for American expats when it comes to taxes. One of the most important is that you must file a US tax return even if you do not owe any tax. This is because you may be eligible for certain credits and deductions that can reduce your tax liability. You may also need to file a return if you have foreign income.

Conclusion:

As an American expat, there are a number of tax breaks available to you. The most common include the Foreign Earned Income Exclusion and the Foreign Tax Credit. You may also be eligible for the home mortgage interest deduction and other deductions and credits. It is important to understand how these breaks work so that you can take advantage of them.