Get Publication 516 (Rev. January 1998). U.S. Government Civilian Employees Stationed Abroad

The US is one of the few countries that taxes its citizens on their worldwide income, regardless of where they live or earn their income. This means that American expats are potentially subject to double taxation - once by the country where they earn their income, and again by the United States. NOTE!

Yes, U.S. citizens may still have to pay federal AND state taxes even if they live abroad.

You are taxed on your worldwide income, even though you live and work abroad. However, you may receive certain allowances and have certain expenses that you generally do not have while living in the United States.

If you are a U.S. citizen or resident 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.

Key Takeaways. Some US expats are required to pay state taxes even after moving overseas, depending on the state where the expat has residency. Taxpayers can change or terminate their state residency to erase their state tax obligations.

If you are a U.S. citizen or resident 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.

You are taxed on your worldwide income, even though you live and work abroad. Many of the expenses you are likely to have, such as moving expenses and foreign taxes, and whether or not you can deduct them on your tax return. U.S. possessions. Tax Guide for Individuals With Income From U.S. Possessions.

The maximum foreign earned income exclusion amount is adjusted annually for inflation. For tax year 2022, the maximum foreign earned income exclusion is the lesser of the foreign income earned or $112,000 per qualifying person. For tax year 2023, the maximum exclusion is $120,000 per person.