US Citizens Abroad: Taxes, Passports, Military Service
The United States taxes on the basis of citizenship. This means it taxes American citizens on their worldwide income regardless where they live. An American citizen living in London, or Toronto, or Tokyo, or Johannesburg, generally must file U.S. tax returns and pay U.S. tax, even if he or she does not live in or travel to the U.S. Taxation is not based on any physical presence test. The source of the income makes no difference either: income exclusively earned and additionally taxed abroad is also subject to U.S. reporting.
As part of an annual tax return filing, US Citizens are also subject to certain foreign assets and bank account reporting. US citizens living overseas who have foreign financial assets in excess of $200,000 for single filers and $400,000 for joint filers must report those assets every year on a Foreign Account Compliance Act (FATCA) Form 8938 to be filed with the 1040 tax return. In addition to the FATCA form 8938 for financial account reporting, the US Treasury requires that US Citizens overseas also file a separate bank reporting form, the Foreign Bank Account Report (FBAR) or FinCEN-114.
US citizens, even if they are citizens of another country, must enter and leave the United States using their US passport when visiting for leisure or business.
American Citizens can request or renew a US passport at any time either at a US passport facility in the US (usually your local post office) or at a US consulate abroad. If you haven't had a US passport previously, you'll have to prove your US citizenship either with a US birth certificate, a Consular Report of Birth Abroad or a Certificate of Naturalization. In addition to proof of citizenship and proof of identity, you will also have to provide your full name and any previous names you've had (due to marriage, etc.), date of birth, your permanent address and valid mailing addres (either US or foreign), and your Social Security number (if you have one). The necessity of providing this information was formalized by an amendment to Article 26, Part 301 of the Code of Federal Regulations (CFR) which went into force on July 18, 2014.
Recently, there has been some confusion regarding the need for providing a US Social Security number for US passport applications and US passport renewals.
If a US citizen has ever been issued a US Social Security number, they must provide this number on their application to renew/apply for a US passport (From State Department page: 22 U.S.C. 2714a and 22 C.F.R 51.60(f) requires you to provide your Social Security number, if you have one, when you apply for a U.S. passport or renewal of a US passport.)
If, however, a US citizen has never been issued a US Social Security number there is no need to apply for a US Social Security number in order to obtain or renew a US passport. However, US citizens who never had a Social Security number, when applying for a US passport, must provide a sworn statement stating that they were never issued a US Social Security number. https://travel.state.gov/content/passports/en/passports/applying-for-a-u-s--passport-from-outside-the-united-states.html .
Although applying for a Social Security number is not necessary when applying for or renewing US passports, US Social Security numbers are needed for other US government agency services (e.g. the IRS) and for US employment and banking purposes. ACA recommends that all US citizens considering more interaction with US government services, for filing US taxes, entering the US employment market, etc., consider applying for a US Social Security number as well as for their children born abroad.
Beginning on November 1, 2016, glasses should NOT be worn for US passport photos. For more information on this and general passport photo requirements, see: https://travel.state.gov/content/passports/en/passports/photos/photo-examples.html
Under current law, all male US citizens are required to register with the US Selective Service System within 30 days of their 18th birthday.
At the present time there is no obligation to serve (induction), but registering for the draft is still required for all men between the ages of 18 and 25, even for US citizens living abroad. In addition, non-US-citizen males between the ages of 18 and 25 (inclusive) living in the United States must register. This includes permanent residents (holders of green cards), refugees, asylees, and illegal immigrants. Foreign males lawfully present in the United States who are non-immigrants, such as international students, visitors, and diplomats, are not required to register.
Failure to register as required is grounds for denying financial aid, federal grants and loans, certain government benefits, eligibility for most federal employment, and, if the person is an immigrant, can deny eligibility for US citizenship. Those who were required to register, but failed to do so before they turn 26, are no longer allowed to register, and thus may be permanently barred from federal jobs and other benefits, unless they can show to the Selective Service that their failure was not knowing and willful.
If you are a US citizen living or visiting overseas at the time you are required to register, go to the nearest US Embassy or Consular office where personnel will assist you in registering. You can also register online at the Selective Service web site www.usa.gov/selective-service.
Until their 26th birthday, registered males must notify Selective Service within ten days of any changes to information regarding his status, such as name, current mailing address, permanent residence address.
A dual national whose other country of nationality has an agreement with the US that specifically provides for an exemption, is exempt from induction. However, he should be registered with Selective Service. Some countries have agreements with the US which exempt an immigrant or national, who is a citizen of both that country and the US, from military service in the US Armed Forces. An immigrant who requests and is exempt under an agreement or bilateral treaty can never be naturalized as a US citizen, and may have trouble reentering the US if he leaves.
An immigrant who served at least a year in the military of a country with which the US is involved in mutual defense activities will be exempt from military service if he is a national of a country that grants reciprocal privileges to citizens of the US.
For more information, see the Selective Service System website http://www.sss.gov.
This ACA webpage was updated on 20 April 2018.