Q.When returning to the United States as a US citizen from a foreign country, is my client subject to any taxes?
A. Duty and internal revenue tax are required to be paid on articles acquired abroad. US Citizens are allowed to bring back $400 worth of merchandise duty free. If your client is returning directly from a Caribbean Basin Economy Recovery Act country, the limited value of duty free merchandise allowed is raised to $600. The next $1,000 worth of items your client brings back is dutiable at a flat 10% rate.
Q. If my client is a US citizen but have been living outside the United States, must my client file a tax return?
A. Yes. Just because your client has been living outside of the United States, they are not relieved of having to file a tax return. They may, however, be entitled to various deductions, exclusions and credits under the US tax laws, international tax treaties and conventions between the United States and a number of foreign countries.
Q.If my client works outside the United States, does he/she still need to file a tax return?
A.Yes. Working outside of the United States does not mean that your client is exempt from having to file a tax return. He/she may be entitled to various deductions, exclusions and credits under the US tax laws, international tax treaties and conventions between the United States and other countries.
Q.If my client is employed outside of the United States, does my client have to report income earned outside the US on his/her tax return?
A.US citizens must report their worldwide income on their federal income tax returns. Your client may be required to pay tax on this income earned abroad.
Q.My client is a US citizen living abroad. Where can he/she find forms, information and instructions for filing his/her US tax return while in a foreign country?
A.During the filing period, your client can usually obtain the necessary federal income tax forms from the nearest US embassy or Consulate. In addition, the IRS has put together a package of forms and instructions called Publication 776 for US citizens living abroad.