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I Don’t Think I’m Actually an Expat. Do I Need to File?

Q&A: I don’t think I’m actually an expat. Do I need to file?

Q: Hi, I’m American but I live in the Netherlands and am married to a Dutch citizen. I am not an expat, as I’m on a highly skilled migrant visa and I work for a Dutch company, earning euros. I’ve been told that I need to file a tax return in the US– can you advise?

A: Because you are a US citizen living and working abroad, you are an expat. Let me qualify that – by our definition you are an expat!

All US citizens are required to report their worldwide income each year. You do have to file.

Based on what your question it looks like you will have to file Married Filing Separate instead of Married Filing Joint. If your husband is a non-resident alien with no exposure to the US then you must file MFS.

There’s good news, though: the IRS provides two tools to help reduce, or eliminate, double taxation. The first is the Foreign Earned Income Exclusion, which if you qualify, allows you to exclude up to $91,500 for the 2010 tax year. The second tool is the Foreign Tax Credit. This, potentially, gives you a dollar-for-dollar credit against your US taxes for taxes paid to foreign country.

It is more complex than that and various factors can determine the outcome. But, that is the gist of it.

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