# Tom Griffiths on The 4 Most Common US Expat Tax Questions Answered Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2021-09-21 Category: FINANCE Category URL: https://financedigest.com/category/finance Meta Title: US Expat Tax FAQs: Expert Advice for American Expats Living Meta Description: Gain insights on US expat tax matters, including filing requirements, the Foreign Earned Income Exclusion, tax treaties, and special benefits for expat parents. URL: https://financedigest.com/tom-griffiths-tax-advisor-on-the-4-most-common-us-expat-tax-questions-answeredhtml ![undefined](undefined) ![Tom Griffiths - tax advisor](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/tom-griffiths-tax-advisor-1736837824597-compressed.jpg) Tom Griffiths – tax advisor – Image source: https://unsplash.com/photos/JaoVGh5aJ3E Tom Griffiths is a UK based US expat advisor and consultant specialising in US expatriate tax matters. [Tom Griffiths](https://www.tomlrgriffiths.com/tom-lr-griffiths/) gets a lot of questions from US expats in the UK and vice-versa. So, in this article, Tom offers some specialist advice on the more common questions [frequently asked](https://www.financedigest.com/gold-investing-most-frequently-asked-questions.html "Gold Investing: Most Frequently Asked Questions"). Every [year American citizens living and working abroad must](https://www.financedigest.com/2019-year-must-re-build-public-trust-finance.html "2019 is the year we must re-build public trust in finance") file their tax returns on their taxable income and tax duty. This is where [taxes for expats can become](https://www.financedigest.com/becoming-data-ready-for-mtd-for-corporation-tax-aligning-vat-and-ct.html "Becoming data-ready for MTD for Corporation Tax: aligning VAT and CT") challenging. US citizens [must stay](https://www.financedigest.com/the-three-must-haves-of-cyber-security-that-you-need-to-stay-cyber-safe.html "The three “must haves” of cyber security that you need to stay cyber safe") up to date regarding their tax responsibilities because tax laws can change from year to year, especially when a new president is inaugurated, changes or tax alterations are more likely. **Do US Citizens** [Living Abroad Have to File Expat Taxes?](https://www.financedigest.com/uks-sunak-under-fire-over-cost-of-living-defends-his-tax-cut-plans.html "UK’s Sunak, under fire over cost of living, defends his tax cut plans") As things currently stand, yes. [Residence Based Tax](https://www.tomlrgriffiths.com/resident-based-taxation-is-it-the-future/) is not currently in operation in the US. Therefore, all US citizens must file their [income taxes](https://www.financedigest.com/the-sixteenth-amendment-and-income-tax.html "The Sixteenth Amendment And Income Tax"), whether living on American home soil or another country. [Reporting annual](https://www.financedigest.com/hmrc-annual-report-and-accounts-2020-21-debt-at-an-all-time-high.html "HMRC Annual Report and Accounts 2020/21 – Debt at an All-time High") worldwide income to the IRS is a legal requirement even for US expats. The US federal [tax returns can be done by an expat tax firm](https://www.financedigest.com/top-north-east-financial-adviser-firm-talks-corporation-tax.html "Top North East financial adviser firm talks corporation tax") or directly by the individual concerned. **Should Americans Who [Live Abroad Be Paying](https://www.financedigest.com/factbox-strikes-protests-in-europe-over-cost-of-living-and-pay-2.html "Factbox-Strikes, protests in Europe over cost of living and pay") Taxes?** American expats are often concerned about whether they will [face double taxation](https://www.forbes.com/sites/forbesfinancecouncil/2021/08/18/how-can-americans-living-and-working-abroad-avoid-double-taxation/) on their worldwide foreign income taxes, which is understandable because the US system for citizens living and [working abroad](https://londonlovesbusiness.com/tom-griffiths-on-does-working-remotely-from-abroad-provide-tax-benefits/) is very different from most other countries. Thankfully, there are benefits that, in many cases, can exempt expats from this, like the Foreign Earned Income Exclusion and the Foreign [Tax Credit](https://www.financedigest.com/eu-us-working-on-deal-to-make-ev-minerals-eligible-for-tax-credits-eu-official.html "EU, US working on deal to make EV minerals eligible for tax credits -EU official"). **Foreign Earned Income Exclusion** The good news is that [American citizens living abroad in a foreign country](https://www.cnbc.com/2021/07/21/26-year-old-american-teaches-english-in-south-korea-advice-to-expats.html) can be excluded up to $107.600 of foreign earned income earned solely from outside the US in 2021. The requirements to [qualify for this taxation exclusion benefit are to be a registered resident of a foreign](https://www.financedigest.com/can-foreign-nationals-qualify-for-a-loan-in-the-uk.html "Can Foreign Nationals Qualify For a Loan in The UK?") country and subject to their local income tax for at least one whole year. Alternatively, to have [lived outside the US for 330 full days](https://www.financedigest.com/pensions-awareness-day-could-you-get-by-on-less-than-living-wage.html "Pensions Awareness Day: Could you get by on less than living wage? ") in a consecutive 12 months of the tax year. Another way to [avoid paying double foreign income](https://www.financedigest.com/5-mistakes-to-avoid-when-creating-passive-income.html "5 Mistakes to Avoid When Creating Passive Income") tax is through tax treaties. They allow US citizens living abroad in a foreign [country to be taxed at a reduced rate](https://www.financedigest.com/ecb-hikes-rates-throws-lifeline-to-indebted-countries.html "ECB hikes rates, throws lifeline to indebted countries") on income from US sources and even afford exemptions on certain income items. Each country has its own tax treaty and allows for different exemptions, so it is crucial to understand the country of residence foreign income tax requirements or, better yet, contact an expert US expat [tax advisor](https://www.tomlrgriffiths.com/) who can make the whole tax return process smooth and straightforward. **Do Parents Get [Special Tax](https://www.financedigest.com/stroock-welcomes-thomas-zampino-as-special-counsel-to-its-tax-certiorari-practice.html "Stroock Welcomes Thomas Zampino as Special Counsel to its Tax Certiorari Practice") Benefits Living Abroad?** Indeed they do because the US continues to provide [financial support](https://www.financedigest.com/how-to-support-employees-amid-financial-strains.html "How to support employees amid financial strains") to families who live abroad. US citizens are entitled to [tax credits](https://www.financedigest.com/tax-credits-for-eu-electric-vehicles-to-dominate-mondays-trade-talks-with-u-s.html "Tax credits for EU electric vehicles to dominate Monday’s trade talks with U.S") and refunds regardless of where they reside globally. Every parent who has a child under 17 with a valid Social Security Number can claim up to $2,000 in non-refundable [credit for each child on their tax](https://www.financedigest.com/automakers-scramble-to-decode-new-u-s-ev-tax-credits.html "Automakers scramble to decode new U.S. EV tax credits") return if they owe taxes. For those who do not owe a tax bill, that amount is $1,400 of refundable credit. **Can Something Be Done About Missing [Tax Years](https://www.financedigest.com/german-tax-revenues-fall-in-august-for-first-time-this-year.html "German tax revenues fall in August for first time this year") When Living Abroad?** The IRS is, of course, all seeing and all [knowing when it comes to tax](https://www.financedigest.com/what-you-need-to-know-about-tax-savings-for-businesses-in-las-vegas-nv.html "What You Need to Know About Tax Savings for Businesses in Las Vegas NV") affairs! Even when living abroad, the IRS will be aware of unfiled foreign taxes and send out correspondence to check why the tax filing obligations were not met. This can result in delays, and delays can result in penalties. The good news is, something can almost always be done about your tax return and expat taxes. Thankfully, the IRS doesn’t just assume someone is trying to [work the tax](https://www.financedigest.com/working-from-home-what-does-it-mean-for-your-taxes.html "Working from home: what does it mean for your taxes?") system. In many cases, missing a tax return is a result of uncertainty or simply forgetfulness. The US taxation system appears so complicated that [1 in 4 Americans living abroad want to renounce citizenship](https://www.tomlrgriffiths.com/are-us-taxes-the-reason-1-in-4-americans-living-abroad-want-to-renounce-citizenship/). Still, with the right advice and support, many expats can make up lost years of tax filing, pay taxes owed, and avoid penalties with little fuss. [Tax rules](https://www.financedigest.com/how-firms-can-continue-to-hire-contractors-with-confidence-when-new-tax-rules-get-underway-in-april-2021.html "How firms can continue to hire contractors with confidence when new tax rules get underway in April 2021") for expats and Americans abroad can be challenging. That is why it is [always advisable to contact a tax advisor if uncertain about any aspect of the taxation system in the US or the country in which one resides because tax specialists always know the best ways to save and the easiest ways to obtain those financial](https://www.financedigest.com/5-ways-to-improve-your-financial-literacy.html "5 Ways to Improve Your Financial Literacy") benefits. **This is a Sponsored Feature.** --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---