Do Expats Have to File a Federal Income Tax Return?
Yes, America is one of only two countries around the globe that income taxes its citizens staying overseas. So no matter how much you travel or where you stay, you still have to file income taxes with Sam’s Uncle. The only exception to this is if your income is below the minimum US filing criteria.
The income includes income from across the globe, not just income that came from the United States. For instance, if your income comes from a local company you operate in Finland with no American clients, you still have to report that income on a United States income tax return if it exceeds the minimum filing needs.Several expats also have to file extra forms like: Statement of certified FACTA or Foreign Financial AssetsForm 114 FinCEN: FBAR or Foreign Bank Account Report
But for now, we are discussing Form 1040: Individual Income tax return of the United States. This is the reason why expat has to file as long as they meet the income criteria. And in a few cases, it is best to file your Federal Income Tax Return even if you don’t.So what is the minimum income to file income taxes for expats? Let us take a look. What Is the Minimum Filing Needs?One of the best ways of United States tax law is that the minimum filing needs are the same for everyone that, includes:
ExpatsResident aliens
Citizens of the United States
Digital nomads
Also, it might change depending on your filing status. For instance, the minimum filing needs for income taxes might change based on whether you file as married or single. There are also particular circumstances where you have to file even if your income is below the usual threshold, such as if you are self-employed.
To assist clear things up, here is the minimum income to file income taxes for each filing status:
SingleIf you are under 65 years and single, you have to file an income tax return if your gross income exceeds $12,200If you are 65 years old or more, then the minimum income that must be filed goes up to $13,850Filing Jointly and Married
In several cases, the minimum filing needs for anyone filing jointly is double the needs for singles.If you and your partner are both a minimum of 65 years old, the minimum income criteria is $27,000If you and your partner are both under 65 years old, you have to file an income tax return if your gross income is more than $24,400If only one partner is 65 years old or more, the minimum income is $25,700 Windower/ Qualifying windowWhen you file as a widower or qualifying widow, it means that your spouse passed away during the financial tax year, and you have at least one dependent kid. If you meet this criterion, the minimum filing needs are the same as when you file jointly with a living partner:$25,700 if you are 65 years old or more, and if you are under 65 years then $24,400 Married, Filing SeparatelyIt is one of the most surprising income criteria on the list. If you are married but filing income separately, you only require a gross income of $5 to file an income tax return. Only it takes $5.
Head of HouseholdHead of house means that:You pay more than half of the supporting cast and housing a dependent, like a parent or kidYou are single legallyWhen you meet these criteria, you are eligible to file as a household head. So, what is the minimum income to file income taxes as a household head?If you are above 65years, the minimum income is $20,000Your minimum income should be $18,350 if you are under 65 years oldWhat special scenarios may reduce minimum filing needs?There are a few scenarios that may reduce the income criteria for your filing status. Regardless of your gross income, you may have to file an income tax return if: You have household employment income taxesYou earned more than $400 in self-employment incomeYou have income taxes on a health saving account or retirement planYou got distributions from a medical savings account or health accountYou earn as a self-employment income more than $400You have Medicare taxes or social security on unreported income, such as tipsYou have at least $108.28 from a church-controlled organization or income tax-exempt church What are the minimum income filing needs if you are a dependent? While several United States individuals are held to the same filing needs for filing income taxes, dependents are in their own category. Once again, the minimum income to file income taxes for dependents staying overseas is the same for dependents in the United States.Let us break down by filing income status again.SingleAs a dependent, if you are under 65 years and a single person and not at all blind, you should file an income tax return if you received the following:Your earned income, along with $350 up to a total amount of $12,200Gross income of more than the larger: $1100Unearned income of more than $1,100Earned income as a single person of more than $12,200
If you are blind, 65 years old, or a single person, you have to file an income tax return if you get the following:Unearned income is more than $2750Gross income is more than the larger of:Your earned income plus $2000 up to a total amount of $13,850$2750Earned income is more than $2750If you are 65 years old, blind, and single, you have to file an income tax return if you get:The earned income amount is $15,500Unearned income of more than $4.400 amountGross income of more than the larger of your earned income along with an extra $3650 up to $15,500 or even $4400 MarriedIf you are married and dependent who is not blind and under 65 years and, you should file an income tax return if you get the following:Earned income amount of more than $12,200The unearned income amount is more than $1,100Gross income should be $1100 or can be your earned income plus $350 that might go up to $12,200The gross income amount is $5 if your partner files a separate income tax return with itemized deductions.If you are 65 years old, blind, or even married, you should file an income tax return if you get the following:
Earned income is equal to or more than $13500The unearned income amount is $2400Gross income is equal to $2400 or more of your earned income, along with an additional $1650 up to $13500 If you are 65 years old, blind, and married, you should file an income tax return if you get the following:Earned income is equal to or more than $15000Unearned income of more than or equal to $3700Gross income of more than the larger of either:Your earned income is $2950 up to $15,000$3700Gross income is more than or equal to $5 if your partner files a separate income tax return and itemized deductionsWhy must you consider filing even if you don’t meet the minimum filing needs?While few expats might be below the minimum income to file income taxes, there are still good reasons to file a United States income tax return anyway. The first thing is you don’t get a refund without filing your income taxes. But beyond this, there are income tax credits that you cannot claim without filing an income tax return, such as:American Opportunity Credit
Health Coverage Tax Credit
Child Tax Credit
Earned Income Tax Credit
Credit for Prior Year Minimum Tax
By selecting not to file an income tax return, you cannot miss out on additional cash in the bank.
Get assistance with your expat income tax return.In this blog, you have a basic understanding of the minimum income to file income taxes for expats. But filing income taxes might be complex, especially for citizens staying overseas in the United States. At USTAXFiling, your tax consultant, we will assist you, especially with basic knowledge of the minimum income, to file income taxes as an expat.
The USTAXFiling team is a highly dedicated and committed team of experts who help you resolve your problem at the earliest. The USTAXFiling team is made up of IRS Enrolled and CPA agents with the specialized expertise required to assist expats in meeting their income tax obligations and optimizing their financial strategies. So, what are you waiting for? Schedule a call with us at USTAXFiling right away, as our expert team is here to help you anytime to help you with income tax filing needs!