IRS Issues Updated Tax Guide for US Expatriates

By Editorial 12 December, 2013

The Internal Revenue Service (IRS) has released the 2013 update to Publication 54, the guide that discusses the special tax rules for United States citizens and resident aliens who work abroad or who have income earned in foreign countries.

The IRS specifies, firstly, that the worldwide income of US citizens or resident aliens is generally subject to US income tax, regardless of where they are living. They are subject to the same income tax filing requirements that apply to US citizens or resident aliens living in the US. Expatriation tax provisions also apply to US citizens who have renounced their citizenship and long-term residents who have ended their residency.

Within its section containing a synopsis of the updates since the 2012 publication, the IRS notes that the maximum foreign earned income exclusion is adjusted annually for inflation, and, for 2013, has increased to USD97,600. In addition, the base housing amount, which is based on 16 percent of the exclusion amount, is USD42.78 per day (USD15,616 per year).

The publication also provides details of other filing requirements, such as for self-employment earnings and contributions to retirement accounts, and reminds taxpayers that, if they claim the foreign earned income exclusion or the housing exclusion (or both), they must figure the tax on their non-excluded income using the tax rates that would have applied had they not claimed the exclusions.

Other chapters contain details of applicable withholding taxes; Social Security and Medicare taxes; other exemptions, deductions and credits; and double tax agreement benefits.

Tags: Individuals | Expatriates | Compliance | Tax | Tax Compliance | Retirement | Tax Thresholds | Internal Revenue Service (IRS) | Self-employment | Withholding Tax | United States | Individual Income Tax | Expats | Other |


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