U.S. income tax return filing
U.S. citizens and resident aliens living outside the United States are required to file worldwide income with the U.S. IRS regardless where they live. The rules for filing income tax, estate and gift tax returns and for paying estimated tax are broadly the same whether you are abroad or in the United States.
When to file your U.S. taxes
The regular tax filing due date is 15 April. U.S. citizens and resident aliens living outside the U.S. receive an automatic extension of 2 months for their tax filing due date to 15 June. Note that you are required to pay any tax due by 15 April regardless. Interest charges over tax payments due apply after 15 April.
You can request an additional 6-month extension to file your U.S. taxes by 15 October. To obtain the 6-month extension, file Form 4868 or ask a tax professional such as Blue Umbrella to help you do this. Note that you are required to pay your (provisional) taxes due by 15 April to avoid interest charges.
You normally cannot get an extension of more than 6 months. However, if you are outside the United States and meet certain requirements, you may be able to get a longer extension.
Foreign Earned Income Exclusion
You may qualify for the foreign earned income exclusion, the foreign housing exclusion and the foreign housing deduction if you meet one of the following criteria:
- as a U.S. citizen, you are a bona fide resident of the Netherlands for an uninterrupted period that includes an entire tax year
- as a U.S. resident foreigner who is a citizen or national of a non-U.S. country which has set up a tax treaty with the United States and who is a bona fide resident of the Netherlands for an uninterrupted period that includes an entire tax year
- as a U.S. citizen or resident alien who is physically present in the Netherlands for at least 330 full days during any period of 12 consecutive months.
You may also be entitled to exclude from income the value of meals and lodging provided to you by your employer on their premises and for their convenience.
U.S. Government Civilian Employees Working Overseas
If you are a U. S. citizen working for the US Government, including the Foreign Service, and you are stationed abroad, your income tax filing requirements are generally the same as those for citizens and residents living in the United States. You are taxed on your worldwide income, even though you live and work abroad. However, you may receive certain allowances and have certain expenses that you generally do not have while living in the United States.
U.S. Foreign Service Employees
If you are an employee of the US Foreign Service and your position requires you to establish and maintain favorable relations in foreign countries, you may receive a nontaxable allowance for representation expenses. If your expenses are more than the allowance you receive, you can no longer deduct the excess expenses as an itemized deduction.
Foreign Earned Income Exclusion, and Foreign Housing Exclusion and Deduction
Certain taxpayers can exclude or deduct income earned in foreign countries. However, the foreign earned income and housing exclusions and the foreign housing deduction do not apply to the income you receive as an employee of the US Government.
Allowances, Differentials, and Other Special Pay
Most payments received by US 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.
Income earned outside the U.S.
Income earned outside the U.S., such as wages, salaries, professional fees, and other income received for personal services you provided to a business (excluding reasonable compensation payments) classifies as foreign income to the U.S. IRS.
Self-employment income
Income received from self-employment may qualify for the foreign earned income exclusion. The excluded amount will reduce your regular income tax but will not reduce your self-employment tax. As a self-employed person, you may be eligible for foreign housing deduction instead of the foreign housing exclusion.
US Netherlands tax treaty
The US Netherlands tax treaty is designed to avoid double taxation. If you are a resident of the Netherlands, then your income is taxed in the Netherlands. As a US citizen or resident alien, you are still required to file your income with the US IRS. The rules for income, estate, gift tax returns and paying estimated tax are broadly the same as if you were living in the United States. Your worldwide income is subject to US income tax regardless of where you reside.
U.S. individual income tax return
If you live in the Netherlands as a U.S. citizen or a resident alien, you are taxed on your worldwide income. However, the income earned in the Netherlands may be excluded up to an annually set threshold amount of $107,600 (2020). In addition, you can exclude or deduct certain amounts for Dutch housing.
Regardless of whether you have income tax due in the United States, you are required to file your income with the U.S. IRS. The rules for income, estate, gift tax returns and paying estimated tax are broadly the same as if you were living in the United States. Your worldwide income is subject to US income tax regardless of where you reside.
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