American Living in Spain: do you still have to file federal taxes to U.S.?

Question

If you are an American living in Spain, do you still have to file federal taxes to U.S.?

Answers

These are the answers of Spainguru’s Facebook group members:

“You have to file, let’s not get that confused with paying.”

“If you don’t meet minimum income requirements you don’t have to file.”

“Yes you are. I recommend you to Nicholas Roscher from Revolve Tax, he does US taxes to all my US clients.”

“Nicholas is great.”

“Yes legally but also no practically. I am not advising you don’t file! But the reality is that if you don’t owe, not filing is 99% of the time (if not more) not going to come with any enforced penalty. The IRS is understaffed and gets no revenue from the effort of chasing down people who don’t file but also don’t owe anything.

Again I’m not recommending this, but for various reasons I haven’t filed in 8 years because I don’t owe anything and actually would have been owed a rebate for the first year I didn’t file. It could make future tax filing more difficult though, if you plan to return or keep a bank account in the US.”

“US requires all citizens to pay taxes every year til they die, no matter where they live. Someone gotta fund that outrageous military budget, after all! ?”

“Not to “pay” taxes actually (not in all cases) but to file tax forms, yes.”

“You must file a return, but, in the return you can claim either a foreign earned income exclusion or a de-facto tax foreign residency (one uses a calculation of how much time you have spent out of the USA and the other one doesn’t take into account your time but only looks at the fact that you pay taxes in another foreign country already and gives you credit for any taxes you already pay abroad).

Both of these will generally, unless you are earning buckets of money, exempt you from paying taxes in the USA, but for the second option to work you will have to also file a return in Spain and pay whatever taxes are required here (of course, you have to pay Spain one way or another, if required).

Spain requires you to pay them first whatever you owe them, so you can’t just pay in the USA and then think you are exempt in Spain, unless you can prove you have been out of Spain for six months in any calendar year.”

“Yes! You must file. Especially if you receive income from the US.”

“Yes. If you’re an American residing on Hades you have to pay taxes lol”

“Of course.”

“Yes.”

“Only if you are above a certain threshold. If you only earn $6000 per year, you’re not obliged to file.”

“Uncle Sam wants his money!”

Conclusion

The consensus among participants is clear: American citizens living in Spain are generally required to file US federal taxes, regardless of their earnings or residency status. However, the obligation to pay taxes depends on various factors, including income levels, the fulfillment of specific tax exclusions, and the tax residency status.

While some individuals have navigated the filing process independently, others recommend seeking professional advice to ensure compliance and optimize tax obligations. The discussion also touches on the practicality of filing and the potential consequences of non-compliance, underscoring the complexity of tax laws for Americans abroad.

Previous articleBeckham’s Law Application: DIY or Hire a Gestor?
Next articleDigital Nomad Visa Spain: Clarifying the 5-Year Rule Start Date
Bruno Bianchi
Bruno Bianchi is the Director at SpainGuru, where he offers his expertise on Spanish immigration, visas, and residency. Over the years, he has been a guide for many navigating the intricacies of Spanish immigration & bureaucracy. In addition to his role at SpainGuru, Bruno anchors the SpainGuru YouTube channel. Through this platform, he shares valuable insights and updates on immigration matters, simplifying complex processes for a global audience. Bruno's dedication to providing clear and trustworthy information has made him a trusted figure in the community. In addition to his pivotal role at SpainGuru, Bruno boasts over 17 years of professional experience in several online platforms. With roles ranging from the COO and co-founder of Spotahome.com and Sales director of the MAPSA Group, Bruno's diverse experiences (he holds 3 nationalities) and multilingual capabilities (he speaks 5 languages) make him a dynamic and influential figure in both the immigration and business sectors.