How to Claim International Income on a U.S. Tax File
Many United States citizens earn foreign income. Even when living abroad, it is important to know that as long as you maintain your U.S. citizenship you are responsible for paying taxes on earned income. Though paying taxes on internationally earned income may sound daunting, the IRS has streamlined the process to make it relatively painless, as long as you know the appropriate forms and steps.
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Instructions
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Acquire Form 4868 from the IRS by visiting irs.gov and downloading the form or calling its international tax assistance office at (215) 516-2000. This is the application for automatic extension of time to file a U.S. tax return, and can be used for both individual and joint returns. Filing the 4868 form will grant you a June 15 filing date.
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Use the appropriate tax form (i.e., 1040, 1040-EZ) to calculate your estimated tax liability. To avoid interest charges, pay your due taxes by April 15, even though you will have an extension to file your complete tax return.
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Whether you reside in the U.S. or abroad, convert your foreign earnings to U.S. dollars. If you have received income from a foreign source on a regular basis, the IRS recommends using the yearly average exchange rates on its website. If you received foreign monies on only a few specific dates, you may use the exchange rates from those dates in your calculations.
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Complete the appropriate tax form as you normally would, including your foreign income. Many people are eligible to file online; contact the IRS to locate the office nearest you if you must or choose to paper-file.
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