US citizens and resident aliens (non U.S. citizen) residing overseas are required to file their income, estate and gift tax returns with the US Internal Revenue Service. Their worldwide income is subject to U.S. income tax regardless of where they live. Although filing is required, you may not be any tax due.
We prepare U.S. Tax Return
For US citizens and resident aliens we now also prepare and file US income tax return with the U.S. IRS. We charge a flat fee of €299 (incl VAT). Online filing, affordable and hassle free.
U.S. individual income tax return
If you live in the Netherlands as a U.S. citizen or a resident alien, you are taxed on your worldwide income. However, the income earned in the Netherlands may be excluded up to an annually set threshold amount of $107,600 (2020). In addition, you can exclude or deduct certain Dutch housing amounts.
Regardless whether you are income tax due or not in the United States, you are required to file your income with the U.S. IRS. The rules for income, estate, gift tax returns and paying estimated tax are broadly the same as if you were living in the United States. Your worldwide income is subject to US income tax regardless of where you reside.
Foreign Earned Income Exclusion
You may qualify for the foreign earned income exclusion, the foreign housing exclusion and the foreign housing deduction if you meet one of the following criteria:
- as a U.S. citizen, you are a bona fide resident of the Netherlands for an uninterrupted period that includes an entire tax year
- as a U.S. resident alien who is a citizen or national of a non-U.S. country with has set-up a tax treaty with the United States and who is a bona fide resident of the Netherlands for an uninterrupted period that includes an entire tax year
- as a U.S. citizen or resident alien who is physically present in the Netherlands for at least 330 full days during any period of 12 consecutive months.
You may also be entitled to exclude from income the value of meals and lodging provided to you by your employer on their premises and for their convenience.
Income earned outside the U.S.
Income earned outside the U.S., such as wages, salaries, professional fee, and other income received for personal services you provided to a business (excluding reasonable compensation payments) classifies as foreign income to the U.S. IRS.
Income received from self-employment may qualify for the foreign earned income exclusion. The excluded amount will reduce your regular income tax but will not reduce your self-employment tax. As a self-employed person, you may be eligible for foreign housing deduction instead of the foreign housing exclusion.
US Netherlands tax treaty
The US Netherlands tax treaty is designed to avoid double taxation. If you are a resident of the Netherlands than your income is taxed in the Netherlands. As a US citizen or resident alien, you are still required to file your income with the US IRS. The rules for income, estate, gift tax returns and paying estimated tax are broadly the same as if you were living in the United States. Your worldwide income is subject to US income tax regardless of where you reside.
Blue Umbrella works with recognized U.S. tax consultants
Filing for a U.S. tax return can be a complex matter. We work with recognized U.S. tax preparers and are happy to help you also to prepare your U.S. taxes.