As an attractive financial hub, Singapore has drawn many US expats to its borders. The most significant reasons that many Americans move abroad, particularly in Singapore for grabbing the career opportunity, set up a business, or out of a sense of adventure. While living abroad is full of lucrative opportunities, but Americans moving to Singapore are required to continue filing taxes as US expat Singapore with the federal government every year no matter where they reside. Along with tax return, many expats are also required to submit a return to FBAR which disclose their assets held in bank accounts in foreign countries by using Form 114.
Relaxing Exemptions Available To US Expat Tax Payers
The United States is among only a few governments who tax ‘international’ income as well as assets earned by their citizens living abroad. Fortunately, there are certain relaxing provisions to US taxation Singapore that help protect the Americans from the possible double taxation system. These provisions include:
- Foreign Tax Credit- This tax exemption provision allowing tax on the remaining income to be reduced based on the taxes paid to foreign governments.
- Foreign Earned Income Exclusion- This exclusion allows the expat taxpayer to exclude USD 105,900 (as per 2019 tax year) in overall earned income from foreign sources.
- Foreign Housing Exclusion- This exclusion allows additional exclusions from the expat income to cover household expenses for living abroad.
Having an experienced tax consultant for preparing the quality return of American Tax Singapore following the strategic tax planning, allow the expatriates to use any of these provisions, in minimizing or possibly eliminating tax liability. Do note that in most of the cases the filing of US expat tax return is required, even if taxes are not owed.
Important Advice For US Expats
In this post, we provide the tax professional advice for US expat tax for Americans living abroad.
- Don’t forget to file- The first and most important piece of expat tax is to timely file the return and avoid late filing penalties.
However, the rules for expatriates USA tax Singapore is pretty clear: every American citizen living or working in Singapore are required to report their worldwide income every year, regardless of the fact where you reside.
- Reduce your tax liability amount- Another great piece of US expat tax consultant advice is that when expats file their return, they can claim one or more IRS exemption provisions as mentioned above that reduce their taxable amount.
However, to take advantage of the available tax exemption, one needs to qualify the eligibility criteria of US expat tax deductions. This is where you come across the needs of an experienced US expat tax professional who will help you take advantage of deductions available to reduce your tax liability as much as possible.
- Report the detail of your foreign accounts- Many US expats are subject to an additional US tax reporting requirement called FBAR (Foreign Bank Account) reporting.
In this report, any expat that has a total amount of over $10,000 in foreign bank accounts, including banks, investment, and pension accounts, at any time of the taxation year has to file a return.
- Don’t forget to file state-imposed taxes- Another important piece of expat tax professional advice is to check whether you have a state tax filing obligation while living in Singapore. This taxation depends on the norms of the state of Singapore, where the expats lived last. However, many states also accept that if you’re living abroad long-term you no longer have to file, but a few states require expats to file the taxes within the deadline.
Therefore, to maximize your US expat tax benefits, make sure you work with an experienced expat tax accountant and seek their tax advice to meet the standards required for expat tax submissions in Singapore.