Our company has many clients who Americans teaching abroad (e.g., international schools). We know that the first year overseas can be both exciting and challenging. In our opinion, taxes should not be one of the challenges. For Americans teaching abroad and those who are considering the move, we have put together this FAQ to address some basic tax-related questions.

Americans Teaching Abroad and US Taxes

1. Do I Need to File a Tax Return?

Yes. All US citizens and permanent residents (Green Card holders) are required to file U.S. income tax returns as long as their gross income exceeds certain minimum thresholds.

Important: US expats are required to report their worldwide income (regardless of location).

2. Should I File Taxes Even if Not Required?

Expats should consider filing taxes even if there is no obligation to file based on the income thresholds. There may be tax credits/refunds to which you are entitled (e.g., child tax credit, education credits).

Important: Filing a tax return starts the clock on the statute of limitation. By not filing, the IRS can audit you anytime.

3. What about Moving and Educator Expenses?

Individuals who leave the country for employment-related reasons can deduct moving expenses (if you are not reimbursed by your employer and work full-time for at least 39 weeks during the first 12 months immediately following your arrival in your new job location).

Regardless of where in the world they live, teachers are entitled to the educator expense deduction. This deduction is worth up to $250, and covers any unreimbursed expenses incurred as an educator.

4. How Can I Lower My Tax Obligations?

The US government provides various tax relief that can lower or eliminate U.S. tax obligations:

• The Foreign Earned Income Exclusion – Allows you to exclude a certain amount of income earned outside the U.S.
• The Foreign Tax Credit – It allows you to offset foreign taxes paid against U.S. tax obligations.

For general information on US expat taxation, please read: US Taxes for Americans Living Abroad – Ultimate Guide.