US Expat Taxes for Americans Living in Singapore – What You Need to Know
There are an estimated 26,000 Americans living in Singapore.
Living in Singapore is a fantastic experience for a variety of reasons – great night life, public transport, schools and healthcare, it’s safe and friendly, and the rest of Asia is on your doorstep. As an American expatriate living in Singapore though, what exactly do you need to know regarding filing US expat (and Singaporean) taxes?
All US citizens and green card holders who earn more than $12,550 (in 2021, or just $400 of self-employment income or just $5 if you’re married to a foreigner) anywhere in the world are required to file a US federal tax return and pay taxes to the IRS, regardless of where in the world they live or where their income originates.
The good news is that if you are paying income tax in Singapore, there are various exclusions and exemptions available to prevent you paying tax on the same income to the IRS too.
US taxes – what you need to know
If you earned more than US$12,550 (in 2021, or $400 of self-employment income etc), you are required to file Form 1040. While taxes are still due by April 15, expats get an automatic filing extension until June 15, which can be extended further online until October 15.
If you have foreign assets worth more than US$200,000 (per person), excluding your home if it is owned in your own name, you also have to file form 8938 to declare them.
If you had a total of more than US$10,000 in one or more foreign accounts at any time during the tax year, you also have to file FinCEN form 114, otherwise known as a Foreign Bank Account Report or FBAR.
“Friendships are forged in a matter of weeks in Singapore but can be relinquished just as quickly. Goodbye parties are popular because departing expats must offload the liquor they can’t take with them.”
– Laura Schwartz, Wall Street Journal.
If you pay income tax in Singapore, there are several provisions that allow you to reduce or avoid paying tax on the same income to the IRS too. The two primary ones are the Foreign Earned Income Exclusion, which lets you exclude the first around US$100,000 of foreign earned income from US tax if you can demonstrate that you are a Singaporean resident, and the Foreign Tax Credit, which gives you a dollar tax credit for every dollar of tax you’ve paid in Singapore. The two can be combined if necessary. Be aware though that even if you don’t owe any tax to the IRS, you still have to file a federal return.
The US and Singaporean governments share taxpayer info, while Singaporean banks pass on US account holders’ account info to the IRS, so it’s not worth not filing or not fully declaring your finances on your return. The penalties for tax evasion for expats are tough to say the least.
If you’re a US citizen, green card holder, or US/Singaporean dual citizen, and you have been living in Singapore but you didn’t know you had to file a US tax return, don’t worry: there’s a program called the IRS Streamlined Procedure that allows you to get up to date with your filing without facing any penalties. Don’t delay though, as it may not be available if the IRS find you first.
Singapore taxes – what you need to know
Singaporean tax rates for residents range from 2% to 22%. There is no Singaporean capital gains or inheritance tax, and Singapore only taxes income arising in Singapore, and income from abroad if it is paid into Singapore.
If you spend less than 183 days a year in Singapore and so are not considered resident for tax purposes, then your employment income arising in Singapore is taxed at a flat rate of 15%, while other types of income are taxed at 22%.
The Singaporean IRS is called the IRAS (Inland Revenue Authority of Singapore), and its website has a wealth of information in English.
The Singaporean income tax return form for residents is form B1, for self-employed people is form B, and for non-residents form M. The Singaporean tax year is the same as the US, January 1st to December 31st, and tax returns are due by April 15th.
We strongly recommend that if you have any doubts or questions about your tax filing situation as a US expat living in Singapore that you contact a US expat tax specialist.