For many Americans teaching abroad, the first year away can be both exciting and challenging.
Hopefully, however, filing your US tax return will not be one of the challenges!
The following FAQ addresses some basic tax-related questions for American teachers. (Note, for a more general look at TEFL and tax, see the article Taxation for English Teachers Abroad).
Do I Need to File a Tax Return?
Almost certainly, Yes!
All US citizens and permanent residents (Green Card holders) are required to file US income tax returns as long as their gross income exceeds certain minimum thresholds. The following table provides the minimum income thresholds by filing category.
|Filing Status||Age (as of 31st Dec)||Gross Income|
|65 or older||$11,500|
|Married Filing Jointly||Both under 65||$20,000|
|Only one under 65||$21,200|
|Both 65 or older||$22,400|
|Married Filing Separately||Any age||$3,900|
|Head of Household||Under 65||$12,850|
|65 or older||$14,350|
with dependent child
|65 or older||$17,300|
Note: US expats are required to report their worldwide income (regardless of location).
Should I File Taxes Even if Not Required?
Expats should consider filing taxes even if there is no obligation to file based on the income thresholds. This is because there may be tax credits/refunds to which you are entitled (eg, child tax credit, education credits).
Note: Filing a tax return starts the clock on the statute of limitation. By not filing, the IRS can audit you anytime.
What about Moving and Teacher Expenses?
Individuals who leave the country for employment-related reasons can deduct moving expenses.
This is applicable if:
- you are not reimbursed by your employer
- you work full-time for at least 39 weeks during the first 12 months immediately following your arrival in your new job location
Regardless of where in the world you live, teachers are entitled to the educator expense deduction. This deduction is worth up to $250, and covers any unreimbursed expenses incurred as a teacher.
How Can I Lower My Tax Obligations?
The US government provides various tax relief that can lower or eliminate US tax obligations:
- The Foreign Earned Income Exclusion – this allows you to exclude a certain amount of income earned outside the US
- The Foreign Housing Exclusion/Deduction – this one relates to additional income that can be excluded for household-related expenses tied to living abroad
- The Foreign Tax Credit – this allows you to offset foreign taxes paid against US tax obligations
HolaExpat helps Americans living abroad with their US tax returns and is staffed by professional IRS Enrolled Agents, experts in expatriate tax return matters.