IRS Form 1040: How to File Your Expat Tax Return

IRS Form 1040: How to File Your Expat Tax Return

Form 1040 is the most common tax form for all US citizens—whether living in the US or abroad. In this post, we’re going to look at the basic details of Form 1040 that every expat should know. 

Key Takeaways

  • Form 1040 is the standard individual tax return for US citizens. 
  • This form is used to report annual income and determine what taxes are owed or what refund can be claimed. 
  • Virtually every American must file Form 1040 annually, regardless of where they live. 

What Is Form 1040? 

Form 1040 is the standard tax return for US individuals, regardless of where they live. This form is used to report: 

  • How much money you made during the year 
  • How much of that money is taxable after applying tax credits and deductions 
  • Whether you owe taxes—and if so, how much 
  • If you do not owe taxes, how much of a refund can you receive 

There are a few variations of Form 1040, each with its own purpose. 

  • Form 1040 is the most common variant, used by most employed or self-employed taxpayers. 
  • Form 1040-SR is meant for senior taxpayers (age 65 and older). This form is nearly identical to the regular Form 1040, but the print is larger to make it easier for senior taxpayers to read it. It also includes a handy chart for determining the taxpayer’s standard deduction. 
  • Form 1040-NR is for non-resident aliens. This form is several pages longer than the standard Form 1040. 
  • Form 1040-X is used to amend a previous tax return that has already been filed. This may be done to fix a mistake or to add additional information. 

Depending on the types of income you have to report, you may have to attach additional forms to your Form 1040, known as schedules. For example, self-employed taxpayers must attach Schedule C to their tax return to report any self-employment income. 

Who Has to File Form 1040? 

Virtually every US citizen is required to file a Form 1040 tax return every year regardless of where they live. Whether you live in Tampa or Tokyo, you still have to report your income to Uncle Sam if it exceeds certain thresholds. 

So what are those thresholds? That depends on your age and filing status. See the table below for the minimum income to file. (All amounts refer to traditional employment income.)  

Filing Status Minimum Income if Under 65 Minimum Income if 65 or Older 
Single $12,550 $14,250 
Married filing jointly $25,100 $27,800 
Married filing separately $5 $5 
Head of household $18,800 $20,500 
Qualifying widow(er) with dependent child $25,100 $26,450 

Important

If you are married and filing jointly, and one spouse is under 65 while the other is 65 or older, the minimum income to file is $26,450. (And no, that $5 for married filing separately isn’t a typo. That really is the filing threshold!)

As mentioned, the table above refers only to traditional employment income. If you receive $400 or more in employment income, you are required to file Form 1040 to report it. This applies to business owners, freelancers, contractors, and all other forms of self-employment. 

You may also have to file Form 1040 if you receive other non-traditional types of income, such as:  

  • Income from a partnership, S corporation, estate, or trust 
  • Insurance policy dividends that exceed your premiums 
  • Tips that weren’t reported to your employer 

In other cases, you may need to file Form 1040 to claim certain tax benefits even if you wouldn’t otherwise be required to file. 

When Is Form 1040 Due? 

For most US citizens, Form 1040 is due on April 15 (April 18 in tax years 2022 and 2023). However, expats are granted an automatic two-month extension to June 15. If necessary, you can also request an additional filing extension to October 17. 

Take Note

An extension to file Form 1040 is not an extension to pay. Regardless of your extension, you will still have to estimate and pay your annual taxes by the original April deadline.

Form 1040 Penalties 

Failing to file Form 1040 can result in severe penalties. These penalties vary depending on a few factors. 

  • If you do not file Form 1040 by the filing deadline, the standard penalty is 5% of all unpaid taxes per month (or part of a month) that your return is late. This can accrue up to a maximum penalty of 25% of your unpaid taxes. 
  • If your return is more than 60 days late, the minimum failure-to-file penalty is $435 or 100% of your unpaid taxes, whichever is less. 

In addition to these penalties, you will also face penalties if you file Form 1040 but do not pay the taxes you owe by the April deadline. These penalties are much lower than a failure-to-file penalty, so it is always best to file even if you don’t think you can pay all of what you owe right away. 

Confused about when you need to file? We can help.

When you live in the US, tax day is simple: April 15th! When you move abroad, it’s not so straightforward! Learn about all the expat deadlines and extensions you need to know to file.

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How to File Form 1040 

Before beginning the process of completing Form 1040, you will want to gather all relevant documents. 

  • For employed expats, the most important document will be Form W-2. 
  • If you are self-employed or receive other forms of income, such as investment income or interest, you will need the appropriate Form 1099 variant to report this. 
  • When claiming deductions or credits, you may also need certain documents to justify your claims. 

Once you have the right documents, it’s time to start on Form 1040 itself. The form itself provides instructions to help clarify what information you should add. 

When filling out 1040, you will start by giving basic information about yourself, such as your: 

  • Identity 
  • Filing status 
  • Contact information 
  • Family 

Then, Form 1040 will ask you to report your income. This may be as simple as inputting the details from your W-2 provided by your employer. On the other hand, if you have other forms of income besides employment income, you may need to fill out and attach the relevant schedule. 

Once you’ve provided the required information about your income, you can claim any deductions, credits, or exclusions that apply to you. As an expat, you may be eligible for several tax benefits not available to Americans living in the US. 

Finally, you will calculate your tax liability. This will tell you how much you owe in taxes, if anything, or if you will receive a refund instead. Once this is done, your Form 1040 will be complete, and you can file it with the IRS. You can either submit Form 1040 through the mail or e-file it through the IRS website. 

For more information, see the Form 1040 filing instructions provided by the IRS

Pro Tip

Form 1040 is a notoriously complicated tax form, and even a minor mistake could have major implications for your tax bill—especially as an expat. We recommend always consulting a qualified expat tax professional rather than attempting to complete and file this form on your own.

We Can Help! 

We hope this guide has helped you understand what Form 1040 means to you as an expat. If you still have questions, we have the answers you need. In fact, we can even prepare and file your expat tax return on your behalf. 

Knowledge is power. Get personalized advice from one of our expat expert accountants.

Whether you need tax advice to prepare for a move abroad, to buy property or even retire, Greenback can help. Consults upfront can help avoid costly mistakes and stress later.

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