Filing a US Tax Return from Australia

I'm living in Australia: Do I have to file a US Tax Return?

That depends. If you are a US citizen or a US green card holder the general answer is yes.

It is dependent on your income level and your filing status as well. But assuming your income is over a relatively small amount, given your filing status, and if you are a US citizen or a US green card holder the general position is that you should file a US return each year to report worldwide income.

On that return you can also claim also various foreign earned income exclusions or claim foreign tax credits (whichever produces the best result), and that may bring your US tax down to a relatively small amount, or possibly down to zero. But, it’s so important to file that return each year to prove that to the IRS.

I already pay taxes in Australia, will I have to pay twice?

Hopefully not. Although, yes, you will still have to file an Australian return, report the income in Australia, pay the Australian tax; and yes, you probably have to file a US tax return, report that income and then claim the foreigners’ income exclusions or the foreign tax credit. And, often, after claiming the foreign tax credits, especially in a case where you’re already paying a relatively high amount of Australian taxes, often, the net US tax is very small and sometimes it can even be zero. However, it’s still important to file that return, claim the foreign tax credits and prove that the tax is, in fact, zero.

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