Voting Opportunities - and Tax Responsibilities - of Americans Overseas
In case you didn’t know – you are one of a group of 6 million+ U.S. Citizens living abroad. If you recently moved overseas, we know that from culture shock to learning new languages and beyond, it can be a lot to get a handle on your local responsibilities as a new resident in your host country. It is important to know that although you are physically outside from the USA, your most vital American citizenship opportunities and responsibilities are still with you.
When you leave the U.S., you bring with you your right to vote. Whether you ever voted in the past within or outside of the U.S., whether you have property or a mailing address in the U.S., whether you intend to return or not – none of that matters! You still have your right to vote from abroad as long as you are a U.S. citizen.
Separate from voting is the obligation to file and report your worldwide income to the IRS. These two citizenship actions are not connected from a bureaucratic or legal standpoint, but they can both be considered your ongoing duties as a U.S. citizen, regardless of where you reside.
As an American living overseas, fulfilling either of these duties can feel challenging. There is Good News for you! Today, there are online solutions to automate both processes and make being an American overseas easier than ever before.
Here is a highlight of the basic responsibilities of being an American overseas with a special emphasis on voting and tax rights.
Overseas Voting 101
For the millions of Americans that reside overseas, more than half are of voting age, however, only about a million voted in the last major U.S. election. We who live overseas know better than most, through our personal experience living internationally, that U.S. elections not only affect our own country, but our U.S. elections and the policy changes that follow also have a profound effect on governments and populations around the world.
As Americans citizens abroad, we see, hear and feel the impact of U.S. leaders around the globe, whether we are living in Canada, the European Union, South East Asia or beyond.
Your vote is consequential. Don’t leave the vital currency of your vote on the table! Use it wisely.
Overseas Voting Tips:
- You must register and request your overseas ballot with a special form – even if you are already registered in the U.S. It is one form, specifically for overseas voters – and it will simultaneously register you as an overseas voter, and request your absentee ballot/s.
- Your full-service, free overseas voting resource is Overseas Vote: https://www.overseasvotefoundation.org
- Register and request your ballot in the calendar year that you wish to vote
- Create a “Voter Account” so that it is easier to send an updated form each year
- Check your Overseas Vote Election Dates & Deadlines to make sure you do not miss your registration/ballot request date
- Vote and be heard!
Note: If you are an American born overseas and have never resided in the U.S., many states allow you to use the U.S. citizen parent/s’ last U.S. residence address as your own. Check the list of states that do allow this, here.
Expat Tax 101
While voting is a right and privilege as an American, filing your U.S. taxes annually is a responsibility, regardless of where you live in the world.
Nathalie Goldstein, CEO and co-founder of MyExpatTaxes, says that “Services like ours make it much easier and affordable for U.S. citizens to get the help they need to file their taxes from anywhere in the world. We created the first-ever automated online tax filing software for overseas U.S. citizens. It takes about 30 minutes to generate a completed tax form that uses all international tax benefits available to ensure you are never double taxed. Our system is made for U.S. Citizens overseas, enabling the majority to file and electronically submit their return to the IRS without the need of a US address, phone number or payment method.”
Your U.S. passport states that all U.S. citizens are required to file and report on their worldwide income. This obligation allows the IRS and other U.S. governmental institutions to keep track of the income coming into your pocket and bank account. Failure to comply leaves you open to fines, interest, and other penalties.
Most U.S. expats will not owe any additional U.S. income taxes if they only made salaried income under the Foreign Earned Income Exclusion (approximately $100,000) or pay high income tax in their host country.
Families abroad can also receive U.S. family support in the form of a refundable portion of the Child Tax Credit.
If you have been abroad for a while and lost track of filing U.S. taxes for many years, the IRS has developed a specific amnesty program for you! It’s called the Streamlined Filing Compliance Procedure. By filing 3 years of prior tax returns and six years of prior Foreign Bank Account Reports (FBARs), you will be completely caught up with your taxes! (And that feels good:-)
Overseas Tax Tips:
- Make sure you are caught up with your tax filing obligations by filing back taxes or using the Streamlined Filing Compliance Procedure
- If you earn more than the filing threshold, file your annual tax return
- File your annual FBAR if, from all non-U.S. financial accounts combined, you have over $10,000 at any time in during the filing year
Filing taxes as a U.S. citizen overseas can be more complex, so it's wise to use a tax software or expert in expat taxation to ensure you are covered under the right expat tax benefits. Software and firms specializing in U.S. expat taxation include:
Is there a connection between Voting and Taxes?
Voting in federal elections for President, Vice President, and U.S. Congress has NO influence on your tax profile or status. Your vote will not trigger residency or tax filing requirements.
Overseas Vote recommends to all U.S. citizens overseas who have no definite plan to return (such as those on a work secondment) that they vote ONLY at the federal level (not state or local).
But take note: If you vote below the federal level, in state or local/municipal elections, you could incur state tax liability. For example, if you decide to vote for governor of your former state while living abroad this could trigger your liability to pay state taxes.
Under state law, the act of voting could indicate to the IRS that you have a domicile (or permanent home in the U.S. which you intend to return to) and thus you have a liability to your state and its income tax requirements.
Domicile is determined by a number of factors, however, so even if you vote in a state or local election, you might still prove that you are domiciled elsewhere and thus not be subject to state income taxation.
In conclusion, we know as overseas U.S. citizens, we have a legal obligation to file U.S. income taxes. That said, taxation should not happen without representation; we should make sure to exercise our right to vote! We can weigh-in on topics that directly affect us as overseas Americans, such as foreign policy and citizen-based taxation. And that would help us all across the world!
