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The US tax system is as it follows the citizen-ship-based taxation method. In almost every other country, the taxes are based on its residents’ residence or income. Most US citizens living in Singapore need clarification or be made aware of their US tax filing obligations.

However, the United States of America taxes all its citizens on their global income, wherever they may live.

US tax filing from Singapore is more complicated than filing your tax return in America, as American citizens living abroad also have to claim credits or exemptions to minimize or, in many cases, eliminate their US tax bill. They may also have to report any registered foreign businesses, investments, bank accounts, and assets.

Here is A Complete Guide to Filing US Tax Returns Online from Singapore 

Who Has to File Ex-Pat Tax Returns? 

All taxpayers Americans living abroad as well as green card holders who have earned over $12,550 in their previous accounting year, or $400 of their income from self-employment work or just $5 of any income if they have a foreign spouse but file the taxes separately have to file a US expat tax return reporting their worldwide income.

US residents living abroad, in Singapore, who have never lived in the United States of America or had an American passport but could have been born in the US while their parents were temporarily residing there or due to having an American parent or grandparent, are required to file expat taxes returns, they are often referred to as accidental Americans.

When expats file their returns from Singapore, they must convert their income earned abroad into US dollars. It is advisable to take the help of an expert American expat tax services to help you file your returns hassle-free.

How can Expats Reduce Their US Tax Bill?

Even though tax filing is a must for US citizens living abroad, if their income crosses the specific threshold mentioned by the IRS, most Am erican citizens settled in Singapore will not end up paying any US taxes. This is because the IRS has made some provisions available that expats can claim when they file their US expat taxes returns to reduce their US tax bill, most often to zero. Take good tax help for expats in Singapore. 

The US expats living in Singapore never pay more income tax than the higher US income tax rate and the rate in the country where they live. Many expats hope or feel that a tax treaty that exists between the US and Singapore will protect them from paying taxes in both countries. However, all expats are taxed as per the provisions of the IRS, as there is no US Singapore tax treaty for Americans abroad. 

Instead, Non-residents US citizens, when filing their tax returns, can claim either the foreign tax credit (FTC)or the foreign earned income exclusion (FEIE). The US foreign tax credit allows Americans abroad who pay foreign taxes to claim American tax credits to the same value as the foreign income taxes they have already paid in Singapore.

The Foreign earned income exclusion allows the US citizens living in Singapore to exclude the first $108,700 of their earned income from US taxation, regardless of whether they are paying foreign taxes.

Expats with children: Americans living abroad with children who claim the foreign tax credit can also claim a child tax credit. This refundable credit greatly boosts US citizens residing in Singapore with children.

Reporting foreign accounts: When filing federal tax returns for non-residents, Americans may need to file a foreign bank account report. Those US expats who have a total of over $10,000 at any time in a year in the qualifying foreign financial accounts are required to report them by filling out Form 114 online. A professional US expat tax services in Singapore will help you accurately fill the form 114 in a hassle-free manner. FBARs are filed to FinCEN instead of the IRS, and penalties for not filing are high.

US social security taxes for expats: Americans living abroad who rendered their services for the US employer or who were self-employed, or even some who worked for foreign employers might have to pay US social security taxes. US expats may also have to pay social security taxes in Singapore and in the United States.

State taxes: Some US expats living abroad have to continue filing state taxes while living in Singapore. Most states will let American citizens living abroad stop filing state taxes once they prove that they live abroad; however, some states – Virginia, California, New Mexico, and South Carolina keep taxing expats who retain any ties with the state by way of property, investments, dependents or voter registration.

Wrap up

US expat taxes can be complicated, so hiring excellent and professional US expat tax services in Singapore is better to make the filing of US expat tax returns straightforward and hassle-free.