All US citizens are required to file a US tax return each year, regardless of whether they are living in the US or abroad. For Americans living in the Czech Republic, this in no exception. Whether you are in the Czech Republic for a year, or you have been living there for many years and you do not plan on returning to the US, you are still required to file a US tax return.
Czech Republic US Tax Treaty
Tax rates in the Czech Republic can be lower than those in the US, especially for individuals in higher tax brackets. This means that a US person filing an Expat return from the Czech Republic has to be careful to know when to use the Foreign Income Tax Credit and the Foreign Earned Income Exclusion. In addition, it means that individuals living in the Czech Republic may have to pay taxes to the US.
In addition, it is important for US citizens living in the Czech Republic to be mindful of the FBAR and FACTA requirements. An US citizen living abroad needs to file an FBAR if he has or has signature authority over foreign financial accounts which are over $10,000 in aggregate. FACTA regulations are similar, however they have higher thresholds.
If you are a US Citizen living in Prague, Brno, or Ostrava and you have question about US taxes, send us an email at firstname.lastname@example.org.