If you are a U.S. Citizen or Permanent Resident (green card holder) working abroad there is a very high probability that you will have to file a U.S. Individual tax return. The U.S. Tax Laws require all U.S. Citizens and Permanent Residents to report all their world wide income regardless of the source of the income when you prepare your tax return. The fact that your income is not from the U.S. does not exempt you from filing a tax return.
If your world wide income is lower than the sum of your standard deduction and exemptions then you are not required to file a U.S. tax return because you will not owe any income tax. Your standard deduction is based on your filing status (married, single, head of household, married filing separately) and your exemptions are based on the number of individuals claimed on your tax return. Your standard deduction and exemption is adjusted each year as a result of inflation. For 2016 the possible standard deductions are:
|Filing Status||Standard Deduction|
|Married Filing Jointly||$12,600|
|Married Filing Separately||$6,300|
|Head of Household||$9,300|
Blind Taxpayers or Taxpayers at least 65 years old may increase their standard deduction by $1,250.00. The exemption amount per individual for 2016 was $4,050.00.
Keep in mind that the foreign income exclusion is not an automatic deduction, you must file a tax return to show how you qualify for it and claim it. If you do not file a tax return you will not receive the deduction. We at www.taxreturnsforusexpats.com specialize in preparing tax returns for U.S. Citizens and Permanent Residents who work and live abroad. We have several years of experience preparing tax returns for U.S. Citizens and Permanent Residents living abroad and are available to answer any questions and concerns you may have about preparing your U.S. income tax return.