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5 Things to Know About US Expat Taxes

In this article, we will discuss the important things to know about US expat taxes. If you want to read our detailed analysis, you can go directly to 10 Things to Know about US Expat Taxes.

5. Foreign Housing Exclusion

Among other benefits of working abroad as a US taxpayer, is foreign house exclusion or deduction. It allows US expatriates to reduce their taxable income by claiming either the housing exclusion or deduction based on their income source. The foreign house exclusion is applicable for employer-paid housing abroad. Self-employed expats can claim the foreign housing deduction to reduce their burden of taxes. However, it is important to consult the IRS resources and conditions for further details. The US residents living abroad can consult Form 2555 to claim the foreign housing exclusion/deduction.

4.  Foreign Tax Credit

US expats that have paid taxes to a foreign country or the US and are liable to US taxes, can claim for a credit or deduction on their taxes. Generally, the IRS only qualifies income, excess profit taxes, and war profits for foreign tax credits. If a US citizen living abroad opts for a deduction, it can reduce taxes on their US taxable income with the help of Schedule A on Form 1040.

If tax is imposed on the combined incomes of two or more people, it will be allocated on a pro-rata basis. For instance, if a taxpayer resides in a foreign country with their partner, and is subject to tax on combined incomes, their filing status on their US income tax return will be ‘married filing separately’. The spouse contributing 60% will be entitled to claim 60% of the foreign taxes on their US tax return, while the other 40% will be claimable by the other partner.

Please note that if you are opting for a foreign housing exclusion or foreign income exclusion, you cannot claim the foreign tax credit. US expats can claim foreign tax credits by filing Form 1116 with their US income tax return.

3. Foreign Earned Income Exclusion

Foreign earned income exclusion is one of the most important things to know about US expat taxes. Among the other tax relief options, US expats can cut a portion of their foreign earnings from US taxes. There are specific residency and income requirements to be eligible for foreign-earned income exclusion, excluding government pay and income earned in international waters. According to the recent changes in the tax rules and payments, a total amount of up to  $126,500 in foreign income can be excluded in 2024. 

IRS provides multiple resources and interactive assistance to help determine eligibility and navigate tax calculations. Filers should consult the Income Tax Worksheet in Form 1040 to claim the foreign-earned income exclusion.

2. The Additional Child Tax Credit

Another benefit provided to US expats abroad includes the child tax credit. It offers financial assistance to families with qualifying children under 17 years old. To qualify for the additional credit, the child must have a valid US SSN and must be a citizen/resident alien/national of the US. 

The maximum amount of the refundable credit can reach 1,600 USD, depending on the filer’s income. A full payment will be provided if a household has an annual earning under $200,000. For joint filers, the threshold is $400,000. The additional child tax credit can be claimed with Schedule 8812 on Form 1040.

1. The COVID-19 Stimulus Checks 

If you still have not claimed your stimulus payments, this is the right time to demand what is rightfully yours. According to 1040Abroad.com, millions of expats are eligible for the COVID-19 stimulus checks. The US government disseminated three Economic Impact Payments rounds, called stimulus checks for eligible Americans as a relief measure during the pandemic. These checks were distributed among people between April 2020 and December 2021, based on their eligibility. 

According to 1040Abroad.com, the first round of Economic Impact Payments provided up to $1,200 per adult and $500 per dependent child. The second round offered up to $600 per individual and dependent. However, the third round provided the individuals and dependents with maximum checks of $1,400, regardless of their age. 

If you are liable for US tax, you can still apply for the COVID-19 stimulus checks. As a taxpayer, you are required to file a 2020 tax return to receive the first and second stimulus checks and a 2021 tax return to get the third check. If a taxpayer has dependents, they are eligible to receive up to $3,200 or more. The payment amount depends on the individual’s filing status, number of qualifying children, and adjusted gross income.

To get a stimulus check, the first and foremost condition is to either be a US citizen, a green card holder, or a qualifying resident alien. It is important to have a social security number and not be claimed as a dependent on someone else’s tax return to be eligible for the stimulus checks. The maximum payment amounts are $1,200, $600, and $1,400 in the three rounds respectively. Dependents with an SSN or ATIN qualify for the third round of stimulus checks regardless of their age. The stimulus checks do not have a minimum amount, however, those exceeding certain income thresholds will receive reduced amounts. For instance, if a filer has an adjusted gross income of up to $75,000, full payment will be provided to them. However, for those filing as the head of household, the limit is $112,500, and for married individuals filing jointly, it is $150,000.

US expats must become compliant with taxes to claim potential financial benefits such as their unclaimed stimulus checks and also shield themselves from hefty IRS penalties by filing the taxes before June 17.

You can also look at 15 Tax-Friendly Countries for High-Net-Worth Individuals and 20 Countries with the Lowest Income Tax Rates in the World.

Disclosure: Disclosure: This article is sponsored by 1040abroad.com and is not intended to be any kind of advice. Even though we tried to be as accurate as we can be, we don’t guarantee the accuracy of the statements made in this article. You understand that Insider Monkey doesn’t accept any responsibility and you will be using the information presented here at your own risk. You acknowledge that this disclaimer is a simplified version of our Terms of Use, and by accessing or using our site, you agree to be bound by all of its terms and conditions. If at any time you find these terms and conditions unacceptable, you must immediately leave the Site and cease all use of the Site.

AI, Tariffs, Nuclear Power: One Undervalued Stock Connects ALL the Dots (Before It Explodes!)

Artificial intelligence is the greatest investment opportunity of our lifetime. The time to invest in groundbreaking AI is now, and this stock is a steal!

AI is eating the world—and the machines behind it are ravenous.

Each ChatGPT query, each model update, each robotic breakthrough consumes massive amounts of energy. In fact, AI is already pushing global power grids to the brink.

Wall Street is pouring hundreds of billions into artificial intelligence—training smarter chatbots, automating industries, and building the digital future. But there’s one urgent question few are asking:

Where will all of that energy come from?

AI is the most electricity-hungry technology ever invented. Each data center powering large language models like ChatGPT consumes as much energy as a small city. And it’s about to get worse.

Even Sam Altman, the founder of OpenAI, issued a stark warning:

“The future of AI depends on an energy breakthrough.”

Elon Musk was even more blunt:

“AI will run out of electricity by next year.”

As the world chases faster, smarter machines, a hidden crisis is emerging behind the scenes. Power grids are strained. Electricity prices are rising. Utilities are scrambling to expand capacity.

And that’s where the real opportunity lies…

One little-known company—almost entirely overlooked by most AI investors—could be the ultimate backdoor play. It’s not a chipmaker. It’s not a cloud platform. But it might be the most important AI stock in the US owns critical energy infrastructure assets positioned to feed the coming AI energy spike.

As demand from AI data centers explodes, this company is gearing up to profit from the most valuable commodity in the digital age: electricity.

The “Toll Booth” Operator of the AI Energy Boom

  • It owns critical nuclear energy infrastructure assets, positioning it at the heart of America’s next-generation power strategy.
  • It’s one of the only global companies capable of executing large-scale, complex EPC (engineering, procurement, and construction) projects across oil, gas, renewable fuels, and industrial infrastructure.
  • It plays a pivotal role in U.S. LNG exportation—a sector about to explode under President Trump’s renewed “America First” energy doctrine.

Trump has made it clear: Europe and U.S. allies must buy American LNG.

And our company sits in the toll booth—collecting fees on every drop exported.

But that’s not all…

As Trump’s proposed tariffs push American manufacturers to bring their operations back home, this company will be first in line to rebuild, retrofit, and reengineer those facilities.

AI. Energy. Tariffs. Onshoring. This One Company Ties It All Together.

While the world is distracted by flashy AI tickers, a few smart investors are quietly scooping up shares of the one company powering it all from behind the scenes.

AI needs energy. Energy needs infrastructure.

And infrastructure needs a builder with experience, scale, and execution.

This company has its finger in every pie—and Wall Street is just starting to notice.

Wall Street is noticing this company also because it is quietly riding all of these tailwinds—without the sky-high valuation.

While most energy and utility firms are buried under mountains of debt and coughing up hefty interest payments just to appease bondholders…

This company is completely debt-free.

In fact, it’s sitting on a war chest of cash—equal to nearly one-third of its entire market cap.

It also owns a huge equity stake in another red-hot AI play, giving investors indirect exposure to multiple AI growth engines without paying a premium.

And here’s what the smart money has started whispering…

The Hedge Fund Secret That’s Starting to Leak Out

This stock is so off-the-radar, so absurdly undervalued, that some of the most secretive hedge fund managers in the world have begun pitching it at closed-door investment summits.

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Why? Because excluding cash and investments, this company is trading at less than 7 times earnings.

And that’s for a business tied to:

  • The AI infrastructure supercycle
  • The onshoring boom driven by Trump-era tariffs
  • A surge in U.S. LNG exports
  • And a unique footprint in nuclear energy—the future of clean, reliable power

You simply won’t find another AI and energy stock this cheap… with this much upside.

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Disruption is the New Name of the Game: Let’s face it, complacency breeds stagnation.

AI is the ultimate disruptor, and it’s shaking the foundations of traditional industries.

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The Talent Pool is Overflowing: The world’s brightest minds are flocking to AI.

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A New Dawn is Coming to U.S. Stocks

I work for one of the largest independent financial publishers in the world – representing over 1 million people in 148 countries.

We’re independently funding today’s broadcast to address something on the mind of every investor in America right now…

Should I put my money in Artificial Intelligence?

Here to answer that for us… and give away his No. 1 free AI recommendation… is 50-year Wall Street titan, Marc Chaikin.

Marc’s been a trader, stockbroker, and analyst. He was the head of the options department at a major brokerage firm and is a sought-after expert for CNBC, Fox Business, Barron’s, and Yahoo! Finance…

But what Marc’s most known for is his award-winning stock-rating system. Which determines whether a stock could shoot sky-high in the next three to six months… or come crashing down.

That’s why Marc’s work appears in every Bloomberg and Reuters terminal on the planet…

And is still used by hundreds of banks, hedge funds, and brokerages to track the billions of dollars flowing in and out of stocks each day.

He’s used this system to survive nine bear markets… create three new indices for the Nasdaq… and even predict the brutal bear market of 2022, 90 days in advance.

Click to continue reading…