Foreign Taxes

Citizens of the United States get taxed on their worldwide income. So if you are a citizen of the US, and you are presently residing outside of the country, you will still have an obligation to file and report your income. There is a credit for foreign taxes paid, which oftentimes ends up exceeding the American tax figure, but you still need to do this reporting. This is a tax niche that a lot of tax professionals stay away from because it can get confusing.

In addition to the situation mentioned above, if you are a citizen or a legal resident with a tax filing requirement with the United States, you will also need to report any income sourced in a foreign country. This could be foreign wages, interest, rental income, retirement and pension income.