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Tax Facts for US Citizens and Green Card Holders

The United States has one of the most interesting and highly regulated tax systems globally.

It is one of only two countries that taxes its citizens on their income no matter where they live in the world.


Here are some important facts for US citizens and green card holders to keep in mind.


If living outside the US


  1. The Us federal government has access to every bank account in the world, and they can take money from people they deem to owe money without the bank account holder's permission. Not reporting on income made outside the US is a dangerous and criminal move.

  2. American passport and green card holders must pay federal taxes every year even if they have been living outside the United States for several years. They need to do tax returns even if they have never lived in the USA (e.g being born to American parents abroad).

  3. Income is not just defined by your salary. For example, in the UK, IRA and ISA accounts are among many accounts which are taxed as income under federal tax.

  4. A good foreign tax accountant will have knowledge of double taxation agreements that can help save you money.

  5. Foreign Bank Account Reports (FBAR) is separate from your state and federal tax return and requires that every single foreign bank account that has a total of £10,000 or over is reported.

  6. Citizens who do not complete their FBAR can be subject to $10,000 and more in penalties if not completed willingly.

  7. If you make a mistake of not reporting accounts you have which can include pensions, retirement accounts, insurance policies and more, you could be facing a hefty fine.


If living & moving within the US


  1. Different states have different laws affecting your taxes. Each state is entirely different from the next in regards to sales, housing and other taxes. If you are moving within the US, consider which state’s tax laws will best suit your circumstances.

  2. If you are a resident in any state, you must either pay a flat rate or progressive rate tax.

  3. Recently many companies have shifted from California to Texas for the better tax conditions in the state.

  4. Most companies that need not be tied to any other part of the country, will set up as a Delaware incorporation, as this offers the best tax conditions for most companies.


As listed above, there are many complexities which can affect individuals making even seemingly simple situations more complicated than expected. By hiring a foreign tax expert you will be assisted in determining how best to submit your tax returns so that the greatest savings can be made, you might even find you are owed amounts from previous years. We can bring in returns from at least 3 years backdating - often our clients are happy to find the IRS owes them money. If you’d like a free consultation to see how we might be able to help you, be in touch.




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