With an expatriate population of 9.5 million, the United Arab Emirates (UAE) is globally renowned as the hub for finance and trade in the Middle East. And, as a tax haven, the UAE is steadily promoting itself. However, you continue to be subject to US expat taxes no matter where you live if you are an American expatriate. This dilutes the low tax appeal of the UAE somewhat. In Abu Dhabi, Dubai, or anywhere else in the United Arab Emirates, the following guide will help you understand your tax obligations as an American expatriate.
US Expat Taxes in UAE
Suppose you are a United States citizen or permanent resident. In that case, if you live in Albuquerque or Abu Dhabi, you are obliged to file US expat taxes with the federal government each year.
In addition to the standard income tax return, you may also be expected to file an information return with Foreign Bank and Other Account Reporting (FBAR) Form 114 for your assets kept in foreign bank accounts, in addition to Form 8938 of the Specified Foreign Financial Assets Statement.
Although the US is one of the few governments that taxes its citizens’ and permanent residents’ foreign profits, it has special safeguards to help shield us from double taxation, including:
- The exclusion of foreign earned income enables you to reduce your taxable income on US expat taxes by the first $108,700 earned due to your job while a foreign country resident in 2021 ($107,600 for 2020).
- A foreign tax credit that would cause those sums paid to a foreign government to decrease your tax bill on your remaining income.
- A foreign housing exclusion allows additional income exclusion for particular amounts paid for living expenses due to living overseas.
It would help if you took advantage of these and other techniques to reduce or even eradicate your liability for US expat taxes with proper guidance, and our experts will help you file your US tax returns.
Why Choose Our Services
At USA Expat Taxes, our US tax professionals are certified and approved to prepare and file US tax returns for individuals and companies electronically before the IRS. In terms of international mobility, we have an integrated solution. A smooth tax filing process can be assured by our tax preparation to mitigate the total costs and risks of expatriate tax.
With USA Expat Taxes, you can be sure we will solve all your expat tax problems effectively. A plethora of tax services are provided, including but not limited to:
- US Tax Returns: We prepare your US income tax return, including the most prevalent schedules and forms.
- Small Business Tax Returns: We endorse the returns of small business owners, self-employed persons, or individuals with substantial rental property.
- Global Bank Account Reporting: For individuals who are above a certain level in a foreign account, we file the FBAR form
- Compliance: We help you sort through the records, forms, and laws and get you back to comply with the IRS
- Consulting: If you are uncertain of the need to file federal or state tax returns, we will explain your situation.