Are you a citizen of the United States who has chosen to live in another country? Whether you are planning to return to the U.S. in the future or have plans to stay abroad, it is important to understand what taxes you are responsible for. You may not be exempt from U.S. taxes, even if you are living and working in a different country. Anyone who lives in a country other than that in which they were born and raised is considered an expatriate. Many expats only reside abroad temporarily, with the intention of one day returning to their country of origin. However, there are a select few who choose to leave their home countries permanently. The only way to ensure your safety from tax evasion charges is to understand what U.S. expat tax is, and how it applies to your current situation.

Understanding Your Assets

When first determining what national or international taxes you may be responsible for, it is important to take a look at your assets. At its most basic, an asset is an economic resource that you own or have power over. Assets can be either tangible or intangible, can be owned or controlled to produce value, and have a current positive economic value. Tangible assets include currency, real estate, and equipment, while intangible assets include copyrights, patents, and trademarks. Both tangible and intangible assets can benefit the owner, meaning they are equally important in value. When considering U.S. expat tax, taxation on these assets can quickly become complex because you must rectify two systems of taxation between the United States and the country in which you live. Whether your assets are held in the United States or within the country in which you currently reside, you may be responsible for claiming these assets in your income tax reports for both countries.

Filing Taxes as An Expat

Whether you have chosen to live abroad on a temporary or permanent basis, you are responsible for determining what taxes you are responsible for. Residing outside of your home country does not necessarily exempt you from paying U.S. expat tax; the United States government is both able and willing to pursue you across the globe. Moving overseas is not a reasonable solution for avoiding paying a U.S. tax debt. At its most extreme, even choosing to give up your United States citizenship will not allow you to avoid a tax obligation; you will be unable to give it up while possessing such debt to the federal government. If you are living and earning money in another country, you must pay that country’s taxes. In addition, it is wise to file a return with the United States every year, regardless of whether or not you have any American income or assets. If you do not owe the federal government anything, you may not be legally required to file taxes in your home country, but it is a fantastic preventative measure when attempting to avoid any future tax disputes.

Filing your yearly taxes is confusing enough, even before the consideration of U.S. expat tax. However, by doing additional work now, you can avoid being personally audited by the IRS in the future, should any issues arise.


Esquire Group, a boutique international tax advisory firm specializing in tax consulting, tax planning and compliance and helping corporate and individual taxpayers with Offshore Voluntary Disclosure Program, asset protection, and US expat taxes ( EsquireGroup/US-Expat-Tax ). To learn more about us, visit EsquireGroup/about.