u.s. expat tax guide – singapore
Standard or Itemized Deductions: Which is Better in Singapore?
It depends on how many deductible expenses you have.
The standard deduction is a fixed amount that reduces your taxable income automatically, without the need to list every expense. For the 2024 tax year, the standard deduction is US$14,600 for single filers and US$29,200 for married couples filing jointly (it’s US$21,900 if you file as head of household).
If you think your total allowable expenses—such as mortgage interest, charitable contributions, and certain other payments—may add up to more than these amounts, you might benefit from itemizing those deductions instead.
Itemizing can be more work. You’ll have to list each qualifying expense on a special schedule (Schedule A), and only certain types of expenses can be deducted. Common ones include:
- Mortgage Interest (for a primary home, subject to certain limits)
- Charitable Contributions (to qualifying organizations)
- State and Local Taxes (though many expats in Singapore do not owe state taxes if they have no US state residency)
- Some Medical and Dental Expenses (only amounts above a certain percentage of your income)
If your total itemizable expenses exceed your standard deduction, you might see a lower overall tax bill by choosing to itemize. However, most US citizens in Singapore see the standard deduction as being enough, since they don’t really feel like they’re missing out on much.
What other tax deductions and credits are available for US Expats in Singapore?
Foreign Earned Income Exclusion (FEIE)
One of the most significant breaks for US expats is the Foreign Earned Income Exclusion. If you work in Singapore and meet either the Bona Fide Residence Test (you live there for a full calendar year) or the Physical Presence Test (you’re outside the US for at least 330 days in a 12-month period), you can exclude up to US$126,500 of foreign-earned income in 2024. This applies to salaries and self-employment earnings earned abroad.
Foreign Housing Exclusion or Deduction
If you pay for housing in Singapore (rent, utilities, and eligible maintenance costs), you may claim a Foreign Housing Exclusion if you’re an employee or a Foreign Housing Deduction if you’re self-employed. This benefit can exclude additional income beyond the FEIE amount, although you must subtract a base housing amount (set by the IRS) first. Because Singapore is considered a high-cost location, many expats can exclude quite a bit, reducing or eliminating US taxable income.
Foreign Tax Credit (FTC)
Rather than excluding your income, you might choose to claim a tax credit for Singapore taxes paid. The Foreign Tax Credit is designed to prevent double taxation on the same earnings. If you make more than the FEIE allows or don’t want to use the FEIE, the FTC can offset the US taxes by the amount you’ve already paid in Singapore. Some people also mix both methods—excluding a portion of income and taking a credit on the rest—depending on what yields the lowest US tax.
Additional Child Tax Credit (ACTC)
If you have children under age 17 (at the end of the tax year), you may be eligible for the Child Tax Credit. A portion of it can be refundable, meaning you could receive money back even if you owe no US tax. Keep in mind that using the FEIE can affect your ability to claim this credit, so planning your tax strategy becomes important if you have children and moderate- to high-level overseas income.
Business Deductions
If you’re self-employed or run a small business in Singapore, you can claim many business expenses on your US return. For instance, advertising costs, office supplies, and a portion of home office expenses can reduce your profit. While you do owe self-employment tax in most scenarios (because Singapore does not have a totalization agreement with the US), these deductions can lower your overall taxable income.
Charitable Contributions
Donations to US-registered charities might still be deducted on your Schedule A if you itemize. Contributions to purely Singaporean charities usually don’t qualify unless the organization has specific approval from the IRS. Be sure to get proper receipts and check that the charity is recognized for US tax purposes.
IRA Deductions
If you contribute to a traditional IRA (Individual Retirement Account) and meet income requirements, you might get a deduction. However, any portion of your income you exclude under the FEIE does not count as earned income for IRA purposes. This can complicate retirement planning, so be sure to verify whether your excluded income affects your IRA contribution limits.
Personal Reliefs
Singapore offers its own personal reliefs (for example, reliefs for NSmen or certain dependents), but these do not directly lower your US tax. You still follow the US system for either taking the standard deduction or itemizing. If you can claim the FEIE, housing exclusion, or tax credits, those may offer a bigger break on your US return than typical US itemized expenses.
Want to know which tax deductions you qualify for? Talk to a tax professional today.
What are the tax filing requirements for US expats in Singapore?
You generally need to file a Form 1040 each year, reporting your worldwide income. However, here are a few things you’ll maybe need to consider:
- Deadlines: While the standard US filing deadline is April 15, expats automatically get a two-month extension to June 15. You can also request an additional extension to October 15.
- Form 2555 (FEIE): If you want to exclude your foreign wages, you file Form 2555 alongside your Form 1040. Prove your foreign residency through either the Bona Fide Residence Test or the Physical Presence Test.
- FBAR Filing: If you have more than US$10,000 combined in foreign bank accounts at any point, you file an FBAR (Foreign Bank Account Report). This is done online through FinCEN’s website (not the IRS forms).
- Form 8938 (FATCA): If you hold certain foreign assets above specific thresholds (for example, more than US$200,000 if you’re unmarried and live abroad), you file Form 8938.
- Form 5471: If you control or own 10% or more of a Controlled Foreign Corporation (CFC) in Singapore, you may need to provide detailed information about that business.
- Self-Employment Tax: If you’re a freelance consultant or run a business on your own, you must still pay Social Security and Medicare taxes in the US unless a totalization agreement says otherwise (Singapore does not have one). This means you fill out Schedule C to show your income and Schedule SE to calculate self-employment tax.
- FATCA Rules & Foreign Worker Levy (FWL): While the Foreign Worker Levy is a Singapore-specific charge and doesn’t directly reduce US tax, it can be considered a business expense if you’re self-employed or own a local company.
How does living in Singapore affect social security and retirement contributions?
If you are a US citizen working in Singapore, you will generally still owe US Social Security and Medicare taxes on your income if you are paid by a US employer or if you are self-employed. This is because there is currently no totalization agreement between the US and Singapore.
Without such an agreement, any money you contribute to Singapore’s Central Provident Fund (CPF) does not reduce or replace your US Social Security obligations.
In Singapore, the CPF is mandatory for citizens and permanent residents. These contributions go toward retirement (through plans like CPF LIFE Scheme), housing, and healthcare.
If you hold only an Employment Pass or work pass, you typically do not pay into CPF unless you become a permanent resident. Once you have permanent residency, you must begin CPF contributions, but those payments do not count as credits toward US Social Security.
For additional retirement savings, Singapore also has a Supplementary Retirement Scheme (SRS), which provides local tax benefits.
However, this does not affect your US obligations.
If you keep contributing to US retirement accounts (like an IRA), remember that any income you exclude under the Foreign Earned Income Exclusion (FEIE) does not count as earned income for IRA contribution purposes.
Meanwhile, if you continue to pay US Social Security taxes (through FICA or self-employment tax), you keep accruing credits toward future US Social Security benefits—even if you live overseas.
How is tax residency determined for US expats in Singapore?
Singapore taxes most income that is earned in or remitted to Singapore.
The Inland Revenue Authority of Singapore (IRAS) generally considers you a tax resident if you spend at least 183 days in the country during the calendar year.
Being a tax resident gives you access to progressive tax rates, personal reliefs, and possibly the Not Ordinarily Resident (NOR) Scheme, which can reduce your Singapore taxes if you meet specific conditions related to traveling for work.
If you are in Singapore only briefly—less than 60 days in a year—your Singapore employment income might be exempt under the short-stay exemption. However, once your stay extends beyond 60 days (and certainly beyond 183 days), your income is typically subject to Singapore taxes at resident or non-resident rates.
From a US perspective, you remain subject to worldwide taxation regardless of your Singapore tax residency. That said, being a Singapore resident can help you qualify for the Bona Fide Residence Test on your US tax return, potentially allowing you to claim the Foreign Earned Income Exclusion and/or Foreign Housing Exclusion.
Alternatively, you could qualify under the Physical Presence Test if you are outside the US for 330 days in any 12-month period.
Either route can help lower or eliminate US tax on your Singapore-sourced income.
What types of taxes do US expats face in Singapore?
- Income Tax: Singapore has a territorial tax system, so income you earn locally is taxed at progressive rates. For tax residents, rates range from 0% on very low income to a top rate of 22%. Non-residents usually pay either 15% or the resident rates, whichever results in a higher tax.
- Property Tax: If you own property, you pay property tax based on its annual value (the potential rental income). This rate differs depending on whether the property is owner-occupied or rented out.
- Goods and Services Tax (GST): Similar to a sales tax, the GST applies to most purchases of goods and services. The rate has been rising in recent years (8% as of 2023), and future increases may occur.
- Stamp Duties: Buying or selling real estate triggers Buyer’s Stamp Duty (BSD) and sometimes an Additional Buyer’s Stamp Duty (ABSD), especially for foreign buyers or those purchasing multiple properties.
- Capital Gains Tax Exemption: Singapore does not typically tax capital gains (for example, profits from selling stocks or real estate), unless the activity is deemed a business (frequent trading).
- Corporate Tax: If you start a business, Singapore’s one-tier corporate tax system taxes profits at 17%. Dividends paid to shareholders are generally tax-free at the individual level.
Foreign Tax Credit (FTC) can be used to offset any US tax. That way, even if you pay Singapore tax, you are less likely to be taxed twice on the same income.
Does the US and Singapore have a tax treaty?
No. The US does not have a tax treaty with Singapore.
Because there is also no totalization agreement, you cannot offset US Social Security or Medicare taxes with contributions to Singapore’s CPF.
Many tax benefits US expats enjoy in treaty countries—like reduced withholding on certain types of income—simply do not apply in Singapore.
Without a tax treaty, US expats usually mainly rely on:
- Foreign Earned Income Exclusion (FEIE): Excluding up to US$126,500 (for 2024) of salary or self-employment income.
- Foreign Housing Exclusion: Excluding a portion of housing costs in Singapore if you’re employed.
- Foreign Tax Credit (FTC): Claiming a dollar-for-dollar credit for taxes paid to the Inland Revenue Authority of Singapore, to avoid paying taxes twice on the same income.
Ankurita Lala, an IRS Enrolled Agent with 6 years of expat tax experience, specializes in helping individuals and entrepreneurs navigate the complexities of foreign business ownership. *Schedule a consultation with Ankurita today.
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