# To file or not to file: the view from the IRS



## underation (Oct 25, 2018)

The IRS says:



> If you are a U.S. citizen or resident alien living or traveling outside the United States, you generally are required to file income tax returns, estate tax returns, and gift tax returns and pay estimated tax in the same way as those residing in the United States. Your income, filing status, and age generally determine whether you must file a return. Generally, *you must file a return if your gross incomye from worldwide sources is at least the amount shown for your filing status in the Filing Requirements table in Chapter 1 of Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad.*
> [..]
> Gross income includes all income you receive in the form of money, goods, property, and services *that is not exempt from tax*. In determining whether you must file a return, you must consider as gross income any income that you exclude as foreign earned income or as a foreign housing amount. If you are self-employed, your gross income includes the amount on the Gross Income line of Schedule C (Form 1040), Profit or Loss from Business, or the Gross Receipts line of Schedule C-EZ (Form 1040), Net Profit from Business.


Residence-country income which has already been fully taxed by the residence country, can’t be taxed again by the US.

Residence-country income which has not been fully taxed by the residence country, may be wholly or partly taxable by the US unless protected by a treaty provision which is available to a US citizen.

So - IMO - an expat can first calculate his/her gross income, counting the items of residence-country income that would not be wholly eligible for US foreign tax credit; but not counting the items of income that _would_ be wholly eligible for US foreign tax credit, nor any items specifically exempted by a treaty provision which is available to a non-US-resident citizen and for which 8833 reporting is waived (e.g., in some treaties, social security pension payments).

If the remaining income doesn’t meet the threshold, the expat is not required to file. If it’s over the income, the expat can opt either to report all income, claiming tax credits for foreign tax paid; or not bother.


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## underation (Oct 25, 2018)

Alternatively, if the expat doesn’t have to slightest intention of ever reporting their non-US income to the IRS, and doesn’t have any US income they need to report in order to pay tax or claim a refund; or never heard tell of birthplace being a proxy for tax-residence — they can simply ignore the whole business.

This seems to be by far the most popular choice.


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