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If you are a U.S. citizen or resident living or traveling outside the United States, you are generally required to file income tax returns in the same way as those residing in the United States. However, the special rules explained in the following discussions may apply to you.
Most individual tax returns cover a calendar year, January through December. The regular due date for these tax returns is April 15 of the following year. If April 15 falls on a Saturday, Sunday, or legal holiday, your tax return is considered timely filed if it is filed by the next business day that is not a Saturday, Sunday, or legal holiday. If you get an extension, you are allowed additional time to file and, in some circumstances, pay your tax. You must pay interest on any tax not paid by the regular due date.
Your return is considered filed on time if it is mailed from and officially postmarked in a foreign country on or before the due date (including extensions), or given to a designated international private delivery service before midnight of the last date prescribed for filing. See your tax form instructions for a list of private delivery services that have been designated by the IRS to meet this “timely mailing as timely filing/paying” rule for tax returns and payments.
If your return is filed late, the postmark or delivery service date does not determine the date of filing. In that case, your return is considered filed when it is received by the IRS.
You may be able to get an extension of time to file your return and pay your tax.
You must file Form TD F 90-22.1 if at any time during the year you had an interest in, or signature or other authority over, a bank account, securities account, or other financial account in a foreign country. This applies if the combined assets in the account(s) were more than $10,000. Do not include accounts in a U.S. military banking facility operated by a U.S. financial institution.
File the completed form by June 30 of the following year with the Department of the Treasury at the address shown on that form. Do not attach it to Form 1040. If you are required to file Form TD F 90-22.1 but do not do so, you may have to pay a penalty of up to $10,000 (more if the failure to file is willful).
If you are a U.S. citizen or resident alien with income from sources outside the United States, you must report all that income on your tax return unless it is exempt by U.S. law. This applies to earned income (such as wages) as well as unearned income (such as interest, dividends, and capital gains).
Most payments received by U.S. Government civilian employees for working abroad, including pay differentials, are taxable. However, certain foreign areas allowances, cost of living allowances, and travel allowances are tax free. The following discussions explain the tax treatment of allowances, differentials, and other special pay you receive for employment abroad.
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Post differentials,
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Special incentive differentials, and
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Danger pay.
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Title I, chapter 9, of the Foreign Service Act of 1980.
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Section 4 of the Central Intelligence Act of 1949, as amended.
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Title II of the Overseas Differentials and Allowances Act.
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Subsection (e) or (f) of the first section of the Administrative Expenses Act of 1946, as amended, or section 22 of that Act.
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Certain repairs to a leased home,
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Education of dependents in special situations,
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Motor vehicle shipment,
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Separate maintenance for dependents,
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Temporary quarters,
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Transportation for medical treatment, and
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Travel, moving, and storage.
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If you are a volunteer leader, allowances paid to your spouse and minor children while you are training in the United States.
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The part of living allowances designated by the Director of the Peace Corps as basic compensation. This is the part for personal items such as domestic help, laundry and clothing maintenance, entertainment and recreation, transportation, and other miscellaneous expenses.
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Leave allowances.
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Readjustment allowances or “termination payments.”
Example.
Gary Carpenter, a Peace Corps volunteer, gets $175 a month during his period of service, to be paid to him in a lump sum at the end of his tour of duty. Although the allowance is not available to him until the end of his service, Gary must include it in his income on a monthly basis as it is credited to his account.
Some other income items that may apply to U.S. Government civilian employees stationed abroad are discussed in this section.
Deductions that may be of special interest to you are discussed here. They include travel expenses, transportation expenses, and other expenses connected to your employment.
Subject to certain limits, you can deduct your unreimbursed ordinary and necessary expenses of traveling away from home in connection with the performance of your official duties. These expenses include such items as travel costs, meals, lodging, baggage charges, local transportation costs (such as taxi fares), tips, and dry cleaning and laundry fees.
Your home for tax purposes (tax home) is your regular post of duty regardless of where you maintain your family home. Your tax home is not limited to the Embassy, consulate, or duty station. It includes the entire city or general area in which your principal place of employment is located.-
Your duties require you to be away from the general area of your tax home substantially longer than an ordinary day's work.
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You need to get sleep or rest to meet the demands of your work while away from home. This requirement is not satisfied by merely napping in your car.
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Certain air transportation workers (such as pilots, crew, dispatchers, mechanics, and control tower operators) who are under Federal Aviation Administration regulations.
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Interstate truck operators and bus drivers who are under Department of Transportation regulations.
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Certain railroad employees (such as engineers, conductors, train crews, dispatchers, and control operations personnel) who are under Federal Railroad Administration regulations.
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Certain merchant mariners who are under Coast Guard regulations.
You can deduct allowable transportation expenses that are directly related to your official duties. Transportation expenses include the cost of transportation by air, rail, bus, or taxi, and the cost of driving and maintaining your car. They do not include expenses you have when traveling away from home overnight. Those expenses are deductible as travel expenses and are discussed earlier.
You may be able to deduct other unreimbursed expenses that are connected with your employment.
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Maintains or improves skills needed in your present position, or
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Meets the express requirements of your agency to keep your present position, salary, or status.
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Is needed to enable you to meet minimum educational requirements for qualification in your present position,
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Is a part of a program of study that can qualify you for a new position, or
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Is for travel as a form of education.
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You have a certificate from the Secretary of State attesting that the expenses were incurred for the benefit of the United States, and would be reimbursable under appropriate legislation if the agency had sufficient funds for these reimbursements.
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The expenses, while specifically not reimbursable under State Department regulations, were ordinary and necessary business expenses incurred in the performance of your official duties.
If you claim a deduction for unreimbursed business expenses, you must keep timely and adequate records of all your business expenses.
For example, you must keep records and supporting evidence to prove the following elements about deductions for travel expenses (including meals and lodging while away from home).
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The amount of each separate expense for travel away from home, such as the cost of your transportation, lodging, or meals. You may total your incidental expenses if you list them in reasonable categories such as daily meals, gasoline and oil, and taxi fares.
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For each trip away from home, the dates you left and returned and the number of days spent on business.
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The destination or area of your travel, described by the name of the city, town, or similar designation.
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The business reason for your travel or the business benefit gained or expected to be gained from your travel.
As a U.S. Government employee, your business expense reimbursements are generally paid under an accountable plan and are not included in your wages on your Form W-2. If your expenses are not more than the reimbursements, you do not need to show your expenses or reimbursements on your return.
However, if you do not account to your employer for a travel advance or if you do not return any excess advance within a reasonable period of time, the advance (or excess) will be included in your wages on your Form W-2.
If you are entitled to a reimbursement from your employer but you do not claim it, you cannot deduct the expenses to which that unclaimed reimbursement applies.-
You are not reimbursed by your employer for any expenses. (Amounts your employer included in your wages on your Form W-2 are not considered reimbursements.)
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If you claim car expenses, you use the standard mileage rate.
In addition to deductible business expenses, you may be entitled to deduct certain other expenses.
If you changed job locations or started a new job, you may be able to deduct the reasonable expenses of moving yourself, your family, and your household goods and personal effects to your new home. However, you cannot deduct any expenses for which you received a tax-free allowance as a U.S. Government employee.
To deduct moving expenses, your move must be closely related to the start of work and you must meet the distance test and the time test.
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Moving household goods and personal effects (including packing, crating, in-transit storage, and insurance) of both you and members of your household, and
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Transportation and lodging for yourself and members of your household for one trip from your former home to your new home (including costs of getting passports).
You may be able to claim other itemized deductions not connected to your employment.
Example.
Adam is an IRS employee working overseas who receives a $6,300 tax-free housing and utility allowance. During the year, Adam used the allowance, with other funds, to provide a home for himself. His expenses for this home totaled $8,400 and consisted of mortgage principal ($500), insurance ($400), real estate taxes ($1,400), mortgage interest ($4,000), and utility costs ($2,100). Adam did not have any other expenses related to providing a home for himself.
Adam must reduce his deductions for home mortgage interest and real estate taxes. He figures a reasonable way to reduce them is to multiply them by a fraction: its numerator is $6,300 (the total housing and utility allowance) and its denominator is $8,400 (the total of all payments to which the housing and utility allowance applies). The result is . Adam reduces his otherwise allowable home mortgage interest deduction by $3,000 (the $4,000 he paid ×) and his otherwise allowable real estate tax deduction by $1,050 (the $1,400 he paid × ). He can deduct $1,000 of his mortgage interest ($4,000 − $3,000) and $350 of his real estate taxes ($1,400 − $1,050) when he itemizes his deductions.
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The amount of each type of tax-free income you received, such as a tax-free housing allowance or tax-free representation allowance.
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The amount of otherwise deductible expenses attributable to each type of tax-free income.
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The amount attributable to each type of tax-free income that was not directly attributable to that type.
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An explanation of how you determined the amounts not directly attributable to each type of tax-free income.
If you pay or accrue taxes to a foreign government, you generally can choose to either claim them as a credit against your U.S. income tax liability or deduct them as an itemized deduction when figuring your taxable income.
Do not include the foreign taxes paid or accrued as withheld income taxes in the Payments section of Form 1040.-
Your only foreign income is passive income, such as interest, dividends, and royalties.
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The total of all your foreign taxes is not more than $300 ($600 for joint tax returns).
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The foreign income and taxes are reported to you on a payee statement, such as Form 1099-DIV, Dividends and Distributions, or 1099-INT, Interest Income.
Example.
Dennis and Christina are married and live and work in Country X. Dennis works for the U.S. Government and Christina is employed by a private company. They pay income tax to Country X on Christina's income only.
Dennis and Christina file a joint tax return and exclude all of Christina's income. They cannot claim a foreign tax credit or take a deduction for the taxes paid to Country X.
You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get information from the IRS in several ways. By selecting the method that is best for you, you will have quick and easy access to tax help.
www.aarp.org/money/taxaide. For more information on these programs, go to www.irs.gov and enter keyword “VITA” in the upper right-hand corner.
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E-file your return. Find out about commercial tax preparation and e-file services available free to eligible taxpayers.
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Check the status of your 2008 refund. Go to www.irs.gov and click on Where's My Refund. Wait at least 72 hours after the IRS acknowledges receipt of your e-filed return, or 3 to 4 weeks after mailing a paper return. If you filed Form 8379 with your return, wait 14 weeks (11 weeks if you filed electronically). Have your 2008 tax return available so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund.
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Download forms, instructions, and publications.
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Order IRS products online.
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Research your tax questions online.
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Search publications online by topic or keyword.
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View Internal Revenue Bulletins (IRBs) published in the last few years.
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Figure your withholding allowances using the withholding calculator online at
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Determine if Form 6251 must be filed by using our Alternative Minimum Tax (AMT) Assistant.
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Sign up to receive local and national tax news by email.
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Get information on starting and operating a small business.
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Ordering forms, instructions, and publications. Call 1-800-829-3676 to order current-year forms, instructions, and publications, and prior-year forms and instructions. You should receive your order within 10 days.
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Asking tax questions. Call the IRS with your tax questions at 1-800-829-1040.
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Solving problems. You can get face-to-face help solving tax problems every business day in IRS Taxpayer Assistance Centers. An employee can explain IRS letters, request adjustments to your account, or help you set up a payment plan. Call your local Taxpayer Assistance Center for an appointment. To find the number, go to
www.irs.gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service. -
TTY/TDD equipment. If you have access to TTY/TDD equipment, call 1-800-829-4059 to ask tax questions or to order forms and publications.
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TeleTax topics. Call 1-800-829-4477 to listen to pre-recorded messages covering various tax topics.
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Refund information. To check the status of your 2008 refund, call 1-800-829-1954 during business hours or 1-800-829-4477 (automated refund information 24 hours a day, 7 days a week). Wait at least 72 hours after the IRS acknowledges receipt of your e-filed return, or 3 to 4 weeks after mailing a paper return. If you filed Form 8379 with your return, wait 14 weeks (11 weeks if you filed electronically). Have your 2008 tax return available so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. Refunds are sent out weekly on Fridays. If you check the status of your refund and are not given the date it will be issued, please wait until the next week before checking back.
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Other refund information. To check the status of a prior year refund or amended return refund, call 1-800-829-1954.
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Products. You can walk in to many post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. Some IRS offices, libraries, grocery stores, copy centers, city and county government offices, credit unions, and office supply stores have a collection of products available to print from a CD or photocopy from reproducible proofs. Also, some IRS offices and libraries have the Internal Revenue Code, regulations, Internal Revenue Bulletins, and Cumulative Bulletins available for research purposes.
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Services. You can walk in to your local Taxpayer Assistance Center every business day for personal, face-to-face tax help. An employee can explain IRS letters, request adjustments to your tax account, or help you set up a payment plan. If you need to resolve a tax problem, have questions about how the tax law applies to your individual tax return, or you are more comfortable talking with someone in person, visit your local Taxpayer Assistance Center where you can spread out your records and talk with an IRS representative face-to-face. No appointment is necessary—just walk in. If you prefer, you can call your local Center and leave a message requesting an appointment to resolve a tax account issue. A representative will call you back within 2 business days to schedule an in-person appointment at your convenience. If you have an ongoing, complex tax account problem or a special need, such as a disability, an appointment can be requested. All other issues will be handled without an appointment. To find the number of your local office, go to www.irs.gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service.
Internal Revenue Service
1201 N. Mitsubishi Motorway
Bloomington, IL 61705-6613
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Current-year forms, instructions, and publications.
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Prior-year forms, instructions, and publications.
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Tax Map: an electronic research tool and finding aid.
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Tax law frequently asked questions.
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Tax Topics from the IRS telephone response system.
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Internal Revenue Code—Title 26 of the U.S. Code.
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Fill-in, print, and save features for most tax forms.
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Internal Revenue Bulletins.
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Toll-free and email technical support.
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Two releases during the year.
– The first release will ship the beginning of January 2009.
– The final release will ship the beginning of March 2009.
www.irs.gov/cdorders for $30 (no handling fee) or call 1-877-233-6767 toll free to buy the DVD for $30 (plus a $6 handling fee). The price is discounted to $25 for orders placed prior to December 1, 2008. Small Business Resource Guide 2009. This online guide is a must for every small business owner or any taxpayer about to start a business. This year's guide includes:
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Helpful information, such as how to prepare a business plan, find financing for your business, and much more.
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All the business tax forms, instructions, and publications needed to successfully manage a business.
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Tax law changes for 2009.
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Tax Map: an electronic research tool and finding aid.
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Web links to various government agencies, business associations, and IRS organizations.
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“Rate the Product” survey—your opportunity to suggest changes for future editions.
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A site map of the guide to help you navigate the pages with ease.
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An interactive “Teens in Biz” module that gives practical tips for teens about starting their own business, creating a business plan, and filing taxes.
During the filing period (January to mid-June), you can get the necessary federal tax forms and publications from U.S. Embassies and consulates. You can request Package 1040-7 for Overseas Filers, which contains special forms with instructions and Publication 54.
Also during the filing season, the IRS conducts an overseas taxpayer assistance program. To find out if IRS personnel will be in your area, you should contact the consular office at the nearest U.S. Embassy.
Phone. You can also call your nearest U.S. Embassy, consulate, or IRS office listed below to find out when and where assistance will be available. These IRS telephone numbers include the country and city codes required if you are outside the local dialing area.
Frankfurt, Germany | (49) | (69) | 7535-3834 |
London, England | (44) | (20) | 7894-0476 |
Paris, France | (33) | (1) | 4312-2555 |
Overseas taxpayers can also call the IRS Philadelphia Service Center for help at (215) 516-2000 from 6 a.m. to 2 a.m. Eastern Standard Time.
If you are in Guam, the Bahamas, U.S. Virgin Islands, or Puerto Rico, you can call the IRS at 1-800-829-1040.
Mail. For answers to technical or account questions, you can write to:
Internal Revenue Service
International Section
P.O. Box 920
Bensalem, PA 19020-8518.
Internal Revenue Service
Taxpayer Advocate
P.O. Box 193479
San Juan, PR 00919-3479.
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