http://www.taxmeless.com/page2.htmlONE: If you are a permanent resident in a foreign country on December 31, you receive an automatic extension to file your tax return until June 15 of the following year. However, you must still pay any U.S. tax you may owe by April 15 or be subject to interest and penalties. Also you must file form TDF 90-22.1 to report your foreign financial and bank account interests (if you had at any time during the year over $10,000 in all such accounts combined) by 6/30/10 or you will incur a $10,000 penalty. No Extensions are granted for filing this special reporting form.
TWO: You can claim an exemption from U.S. Income tax of $91,400 for 2009 (and lesser amounts for earlier years) in earnings from employment or self employment while residing outside of the U.S. for a full calendar year, or for any fiscal 12 month period providing you are not in the U.S. for more than 35 days during that fiscal year. Both you and your working spouse can each separately claim this exemption.
THREE: You can claim a dollar for dollar credit against your U.S. income taxes for foreign income taxes you pay in another country.
FOUR: The U.S. has tax treaties with more than 35 nations throughout the world. Many of these treaties contain special provisions which only apply between the U.S. and the other treaty country. These treaties all contain provisions in which the U.S. can obtain tax information about U.S. Citizens living in the other treaty country and the tax authorities in that treaty country can secure information about their citizens from the IRS.
FIVE: If you reside outside of the US and are married to a spouse that is not a U.S. Citizen or permanent resident (green card holder), your spouse does not have to pay U.S. taxes on their investment and employment income if you do not elect to file a joint return.
SIX: When you live in a foreign country you can obtain a social security number for your children by obtaining Form SS-5-FS through the Social Security Admin website at www.ssa.gov . Also for more on countries with U.S. Social Security treaties and if you are self employed abroad click anywhere on this sentence.
SEVEN: While living abroad, if you take the proper steps to terminate tax domicile or residency in your previous home state (the rules vary from state to state), you no longer have to file a state income tax return and as a result eliminate your state taxes! California, Virginia and New Mexico are several of the states that make it very difficult to terminate your tax residency when moving abroad. Nevada, Washington, Texas and Florida have no state personal income taxes at all!