u.s. expat tax guide – singapore
Do US expats in Singapore have to file a US tax return?
Yes, they do. The United States follows a citizenship-based tax system, which means American citizens and green card holders must report their income to the Internal Revenue Service (IRS)—no matter where they live or work.
Why does the US tax me if I live abroad?
Although most countries tax people based on where they live or earn money, the US is different. If you are a US citizen or Green Card holder, you’re generally required to file a US tax return every year—even if you live in Singapore or any other country.
This system is why you might hear that the US wants to know about your worldwide income.
- Worldwide Income means everything you earn, no matter the currency or the country.
- This can include salary from a job in Singapore, bank interest from a US or foreign account, rental income from overseas property, business profits, and more.
Singapore’s tax system typically focuses on income sourced within Singapore. However, from the perspective of the IRS, your global earnings must be reported on your US tax return.
How do US citizens file taxes in both the US and Singapore?
In the US:
- Form 1040: Report your worldwide income.
- Form 2555 or 1116: Claim exclusions or credits to reduce double taxation.
- Deadlines: The standard deadline is April 15, but if you’re living abroad, you receive an automatic extension to June 15.
In Singapore:
- Tax Residency: You’re considered a tax resident if you stay or work in Singapore for at least 183 days in a calendar year.
- Forms: File Form B/B1 for residents or Form M for non-residents.
- Deadlines: The tax year is from January 1 to December 31, with returns typically due by April 15 of the following year.
How does residency status in Singapore affect tax obligations?
- Residents (staying ≥183 days): Taxed on income earned in Singapore at progressive rates from 0% to 24%.
- Non-Residents (staying <183 days): Taxed at a flat rate of 15% on employment income or the resident rates, whichever results in higher tax.
Singapore generally doesn’t tax foreign-sourced income unless it’s received through partnerships in Singapore.
How does Singapore’s tax system work?
Singapore taxes individuals based on where the income is earned, not on worldwide income. This means:
- Income Earned in Singapore: If you work in Singapore, your salary is subject to Singaporean taxes.
- Income Earned Outside Singapore: Money you earn from other countries isn’t taxed by Singapore, unless you bring it into Singapore under specific circumstances.
Singapore uses a progressive tax system for residents, which means the tax rate increases as your income increases:
- For Residents: Tax rates range from 0% to 22%. The first portion of your income may not be taxed, and higher earnings are taxed at higher rates.
- For Non-Residents: A flat tax rate of 15% on employment income or the resident rates, whichever results in higher tax.
Your residency status affects your tax rates. Generally, if you’re in Singapore for 183 days or more in a year, you’re considered a resident for tax purposes.
Other Taxes
- Goods and Services Tax (GST): This is a tax on most goods and services in Singapore. As of 2024, the GST rate is 9%.
- No Capital Gains Tax: Singapore doesn’t tax profits from selling investments, like stocks or property.
Do I have to file if my income is below a certain level?
Yes, the US sets annual income thresholds to determine who must file a tax return. However, these thresholds change depending on your filing status (e.g., single vs. married).
Here are a few common scenarios for the 2024 tax year (the tax return you would file in 2025):
- Single (Under 65): If your total income from all sources is more than US$14,600, you must file a return.
- Married Filing Jointly (Both US Persons): If you and your spouse combine incomes and both are US taxpayers, the threshold is US$29,200 in total worldwide income.
- Married Filing Separately: This threshold is surprisingly low—just US$5. If you opt to file separately from your spouse, even a small amount of income can trigger a filing requirement.
- Head of Household: If you qualify as the main financial provider for your household and have dependents, your threshold is US$21,200.
For self-employed individuals (freelancers, consultants, or small business owners), if you earn more than US$400 in net self-employment income, you must file a US tax return—regardless of your filing status.
Why is there a US$5 threshold for Married Filing Separately?
This rule came into place following a major tax law change in 2017 (the Tax Cuts and Jobs Act). Before that, the threshold for married filing separately was in the thousands.
Now, if you’re married and do not file jointly, you’ll need to be extremely careful and possibly consider filing a return even if you think you earn too little to bother.
Need help filing US taxes in Singapore? Connect with a tax professional today.
How does self-employment affect US expats in Singapore?
If you are self-employed in Singapore—whether full-time or just earning a bit on the side—you must file a US tax return if your net earnings are more than US$400 a year.
Even if you make well under the standard threshold for single filers (US$14,600), the US$400 threshold for self-employment remains in effect. So, you’d still need to file a return to report that income and potentially pay self-employment tax.
What counts as income for US expats?
“Income” refers to any money you receive, including:
- Salary or wages from a Singapore-based job
- Dividends or interest earned from bank accounts, stocks, or other investments
- Rental income from properties (located in Singapore, the US, or elsewhere)
- Profits from operating a business
- Capital gains from selling assets (like stocks or real estate)
Even if none of this income comes from the US, you must report it on your US tax return. However, there are credits and exclusions you may claim, such as the Foreign Tax Credit (FTC) or the Foreign Earned Income Exclusion (FEIE), which can help reduce or eliminate double taxation.
What are the reporting requirements for Foreign Bank Accounts and Assets?
- FBAR (Foreign Bank Account Report): If the total value of your foreign accounts exceeds US$10,000 at any time during the year, you must file FinCEN Form 114 electronically.
- FATCA (Foreign Account Tax Compliance Act): If your foreign assets surpass certain thresholds—US$200,000 on the last day of the tax year for single filers or US$400,000 for married filing jointly—you need to file Form 8938 with your tax return.
How can US citizens in Singapore avoid double taxation?
To prevent being taxed twice on the same income—once by the US and once by Singapore—you can utilize certain provisions:
- Foreign Earned Income Exclusion (FEIE): For the 2024 tax year, you can exclude up to US$126,500 of foreign-earned income from US taxation if you meet specific residency requirements.
- Foreign Housing Exclusion: This allows you to exclude certain housing expenses from your income, reducing your taxable amount further. For 2024, the base housing amount is US$20,240, and the maximum exclusion is US$37,950.
- Foreign Tax Credit (FTC): This credit lets you offset US taxes with the amount of income tax you’ve paid to Singapore.
These benefits, however, are not automatic.
You must file a US tax return and submit additional forms (like Form 2555 for FEIE and Form 1116 for the FTC) to claim these exclusions or credits.
What if I miss filing or file late?
Late or missed filings can lead to penalties.
The IRS may charge fees for failure to file or failure to pay on time. Moreover, certain informational forms (for instance, those related to foreign financial accounts or foreign businesses) also carry separate penalties.
Many expats who discover they should have been filing for years can use the Streamlined Filing Compliance Procedures, a special IRS program designed to help non-filers get back on track without facing excessive penalties.
If you’ve fallen behind, it’s wise to consult a tax professional familiar with expat issues before taking action.
Do US citizens in Singapore really need to worry about all this?
In short, yes. Despite living in a country with a straightforward tax system like Singapore, American citizens and Green Card holders have a continuing obligation to the IRS.
Although it may feel overwhelming at first, being informed helps you stay compliant and avoid difficulties later on.
For many expats, filing a US tax return doesn’t necessarily mean you’ll owe money. Between the FEIE, the FTC, and the possibility of a lower Singapore tax rate (depending on your situation), your final US tax owed can be low or even zero.
But you won’t know until you file.
How does the Singapore tax system impact US expats?
- Territorial Tax System: Only income earned within Singapore is taxed.
- No Capital Gains Tax: Gains from the sale of investments aren’t taxed.
- Goods and Services Tax (GST): A 9% tax applies to most goods and services.
Since Singapore doesn’t tax foreign-sourced income, US expats often don’t owe Singapore tax on such income but must still report it to the IRS.
Is there a tax treaty between the US and Singapore?
Currently, there’s no tax treaty between the US and Singapore. This means US citizens can’t rely on a treaty to avoid double taxation but can use provisions like the FEIE and FTC to mitigate tax liabilities.
What are my next steps as a US expat in Singapore?
- Identify Your Filing Status: Single, Married Filing Jointly, Married Filing Separately, or Head of Household.
- Sum Up All Income: Calculate all worldwide earnings, from salaries to small amounts of bank interest.
- Check the Thresholds: See if you exceed the relevant limit for your status or if you have self-employment income over US$400.
- Consider Tax Benefits: Investigate the Foreign Earned Income Exclusion, Foreign Tax Credit, or any relevant tax treaty provisions with Singapore.
- Gather Documents: Collect pay statements, investment records, and anything else that reflects your global income.
- Seek Professional Help: If your finances are complex—such as having multiple foreign accounts, real estate, or a business—consult a tax expert.
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.
*30-minutes US$247.
