US Expat Taxes for Americans Living in Thailand – What You Need to Know
There are an estimated 20,000 Americans living in Thailand.
Living in Thailand is an incredible experience for a variety of reasons – the culture, climate, cuisine, the friendly people, and low cost of living to name but a few. As an American expatriate living in Thailand though, what exactly do you need to know regarding filing Us expat (and Thai) 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 if you are paying income tax in Thailand, 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 earn over US$10,000 (or $400 if you’re self-employed), you have to file form 1040. While taxes are still due by April 15th, expats get an automatic filing extension until June 15th, which can be extended further online until October 15th.
If you have foreign assets worth over US$200,000 (per person), excluding your home if it is owned in your own name, you also have to file form 8938 and declare them.
If you had a total of at least 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.
“Taxpayers are liable to file a Personal Income Tax return and make a payment to the Revenue Department by the last day of March following the taxable year.”
– The Revenue Department
If you pay income tax in Thailand, there are several exemptions that allow you to reduce or avoid paying tax on the same income to the IRS as well. The two main 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 Thai resident, and the Foreign Tax Credit, which gives you a dollar tax credit for every dollar of tax you’ve paid in Thailand. The Foreign Tax Credit is normally a better option if you pay more tax in Thailand than you would owe to the IRS, as you can carry the excess credits forward for future use. Be aware though that even if you don’t owe any tax to the IRS, if your income is over US$10,000 (or $400 if you’re self-employed) you still have to file a federal return.
The US and Thai governments share taxpayer info, while Thai banks pass on US account holders’ account info to the IRS, so it’s not worth not filing or being ‘economical’ with the truth on your return. The penalties for tax evasion for expats are severe to say the least.
If you’re a US citizen, green card holder, or US/Thai dual citizen, and you have been living in Thailand 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, in case the IRS find you first
Thai taxes – what you need to know
If you spend 180 days or more a year in Thailand, you are considered a resident for tax purposes.
For residents, income originating in Thailand as well as foreign earned income brought into Thailand is taxable (for non-residents, only the former). Tax rates range from 0% to 35%. Dividend income is taxed at 10%.
The Thai tax authority is called The Revenue Department, and its website has some useful info in passable English regarding personal taxers and deductions here.
The personal income tax return form is called form PIT 1, and it should be filed (in Thai) by March 31 (or April 8 online).
We strongly recommend that if you have any doubts or questions about your tax filing situation as a US expat living in Thailand that you contact an expat tax specialist.