US Citizens and Green Card holders

US citizen and US green card holder have unique filing obligations, unlike citizens of other tax jurisdictions. The US imposes taxation based upon citizenship, not based on tax residency.


If elected, your first $100'800 earned overseas are exempt from income tax (For 2015; amounts change each year), unless you are an employee of the US government. Note that if you are a Foreign Service employee, and your spouse works in the local economy, the exemption still applies for your spouse; however, the calculation changed in 2006 and results in a slightly higher tax bill.


  1. A U.S. citizen who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year ( bona fide residence test ),
  2. A U.S. resident alien who is a citizen or national of a country with which the United States has an income tax treaty in effect and who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year, or
  3. A U.S. citizen or a U.S. resident alien who is physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months. (Physical presence test )


Other considerations and opportunities include the following:

  1. Need to File State Returns—Certain taxpayers must maintain a state of domicile in the United States, and there will be tax obligations to that state (Varies by state, please contact us for details).
  2. Foreign Housing Exclusion or Deduction-- In addition to the foreign earned income exclusion, you can also claim an exclusion or a deduction from gross income for your housing amount if your tax home is in a foreign country, you have self employment income, and you qualify under either the bona fide residence test or the physical presence test.
  3. Retirement You still qualify for the tax advantages of making contributions to a retirement account, such as SEP, IRA or ROTH IRA. These contributions are subject to certain limits based on your gross income, so for the most part the foreign earned income exclusion will not affect them.
  4. Other Income Did you rent your property while living abroad? Your rental income is reported, along with related expenses including but not limited to mortgage interest expense. Dividend or other investment income? Reported, less related expenses.


For further details regarding your tax situation as a US Taxpayer living abroad, please contact us and we will gladly answer your questions.