Originally Posted by danny
#1: I just recently read that although I live overseas I have to file taxes.
#2:I've been living in Spain for over a year and am moving back home (Florida) in June. I know there are tax treaties with Spain and I assumed for a bit that I was exempt (when I first found out). I made minimal money and paid taxes here in Spain on it.
#1:In general yes, however, it depends; you must file a federal income tax return if your income is above a certain level; which varies depending on your filing status, age and the type of income you receive. As a US expat in Spain, you are subject to US taxes on your US source and world wide income that you, in this particular case, earn in Spain. So UNLESS you have any taxable income that you earn in Spain or in US, you actually need to file your US return.
#2: Then you need to pay tax(es) to the Spanish taxing authorities on your income that you earned there in Spain, then you need to file your US return, fed and state returns, to claim your foreign tax credit on the taxes that you pay to the foreign taxing authorities on your tax returns by filing form 1116 and reporting the foreign tax credit on 1040 line 47 or you can itemize your foreign taxes paid to Spain on Sch A of 1040 line 8(to itemize your FTC on Sch A of 1040, you must itemize deductions on your return). ALSO, if you meet certain requirements, you may qualify for the foreign earned income and foreign housing exclusions and the foreign housing deduction.As long as you are a U.S. citizen or a resident alien of the US and you live abroad, you are taxed on your worldwide income. However, you may qualify to exclude from income up to an amount of your foreign earnings that is now adjusted for inflation ($95,100 for 2012). In addition, you can exclude or deduct certain foreign housing amounts. To claim the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction, you must have foreign earned income,i.e, salary wage or commission or etc, NOT unearned income,i.e, dividend or interest, your tax home must be in a foreign country, and you must be one of the following:A U.S. citizen who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year OR a U.S. resident alien who is a citizen or national of a country with which the US has an income tax treaty in effect and who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year, OR a U.S. citizen or a U.S. resident alien who is physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months.
ALSO, To qualify for the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction, your tax home must be in a foreign country throughout your period of bona fide residence or physical presence abroad. Your tax home is the general area of your main place of business, employment, or post of duty, regardless of where you maintain your family home. Your tax home is the place where you are permanently or indefinitely engaged to work as an employee or self-employed individual. Having a "tax home" in a given location does not necessarily mean that the given location is your residence or domicile for tax purposes.
You may follow the instructions here for sure, I mean if you qualify for FEIE credit: Foreign Earned Income Exclusion - Can I Claim the Exclusion or Deduction?