U.S. expats are subject to income taxes

Uncle Sam wants you (to pay your taxes)

Uncle Sam wants you (to pay your taxes)

American expats are subject to U.S. income taxes regardless of where they live and where they make their income. Furthermore, there are special requirements and issues to consider when it comes to tax return preparation. Over the next several months, we will be addressing some of the tax complexities faced by American expats living in Nicaragua.

Question: Do I really need to file U.S. taxes?

In general, if your total income for the year doesn’t exceed the standard deduction plus one exemption, then you don’t need to file a federal tax return. Therefore, individuals with income < $9,750, or married couples filing jointly with income < $19,500 do not need to file (for 2013).

In addition, the amount of income that you can earn before you are required to file a tax return depends on the type of income, your age and your filing status. For example, self-employed people usually need to file – the threshold is a meager $400 in earnings.

Although filing taxes is undoubtedly a headache, many U.S. expats do not realize there are certain benefits. Take for example, the Child Tax Credit. Each child could be worth up to a $1,000 each, even if you did not pay or owe any taxes.


Disclaimer: The answers provided in this article are for general information, and should not be construed as personal tax advice. Tax laws and regulations change frequently, and their application can vary widely based on the specific facts and circumstances involved.

About John Ohe
John Ohe

John Ohe (IRS Enrolled Agent and Chartered Financial Analyst) is Co-founder at Hola Expat. Our firm prepares taxes for Americans living abroad. If you would like to ask a tax-related question, please email us: info@holaexpat.com.

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