29/09/2024
I am a U.S. citizen living and working in New Zealand for many years. I pay income tax in New Zealand. I did not receive any income from U.S. sources during the current tax year. Do I still need to file a U.S. tax return?
Yes. You, as U.S. citizen, will always be treated as a full year resident for U.S. tax purposes regardless of where you live and work. The U.S. tax system is based on citizenship, not residency, which means you must file U.S. taxes on your worldwide income, even if you live and work in New Zealand.
Here are a few key points to consider:
Filing Thresholds: You need to file a tax return if your gross income is at least the amount for your filing status.
Single
Under 65 $13,850
65 or older $15,700
Head of household
Under 65 $20,800
65 or older $22,650
Qualifying surviving spouse
Under 65 $27,700
65 or older $29,200
Married filing jointly
Both spouses under 65 $27,700
One spouse 65 or older $29,200
Both spouses 65 or older $30,700
Not living with spouse at end of year $5
Married filing separately
Any age $5
Other Situations When You Must File a 2023 Return:
You are required to file a tax return if any of the following conditions apply:
• If you owe any additional tax on a qualified plan, including an IRA or other tax-favored account.
• You (or your spouse if filing jointly) received distributions from an Archer MSA, Medicare Advantage MSA, or health savings account.
• You are required to include amounts in income under section 965, or you have a net tax liability under section 965 that you are paying in installments under section 965(h) or deferred by making an election under section 965(i).
Even if you are not required to file a tax return, you should consider filing if you are eligible for a refund. For instance, you should file if any of the following apply:
Income Tax Withheld: You had US income tax withheld from your pay.
Estimated Tax Payments: You made US estimated tax payments during the year or had any of your overpayment from last year applied to this year’s estimated tax.
Additional Child Tax Credit: You qualify for the refundable additional child tax credit.
Foreign Earned Income Exclusion (FEIE): You may be able to exclude up to a certain amount of your foreign earned income from U.S. taxation if you meet specific requirements. For 2023, the exclusion amount is $120,000. Foreign earned income only includes wages, salaries and business income. It does not include any other types of income.
Foreign Tax Credit (FTC): You can claim a dollar-for-dollar credit for taxes paid to New Zealand, which helps to avoid double taxation. The FTC can be applied on any type of income.
Even if you do not owe any U.S. taxes due to these exclusions and credits, you still need to file a return to claim them.
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