US Expat Tax Service for Dual Citizens

Written by: Josh Katz, CPA

In today’s interconnected world, many individuals have the privilege of holding dual citizenship, which allows them to be citizens of two countries simultaneously. While this can bring numerous benefits, it can also present unique challenges, particularly regarding taxation.

If you require assistance with your US tax filings as a dual citizen, Universal Tax Professionals is here to assist you. We provide a wide range of US expat tax services tailored to help Americans living abroad.

In addition to tax preparation services, we offer guidance and planning for the upcoming tax year. This proactive approach allows you to anticipate and address any potential tax ramifications you may encounter as a dual citizen. Should you require assistance with foreign taxes, we have established partnerships with experts in various countries who can support you with your international tax obligations.

2024 US Taxes for Dual Citizens

As a dual citizen with US citizenship, you are generally required to file US taxes annually, regardless of where you live. The US follows a citizenship-based taxation system, meaning it taxes its citizens on their worldwide income rather than just income earned within the US.

As a dual citizen, you are still subject to US tax laws and must fulfill your tax obligations. This includes reporting all sources of income, such as wages, self-employment income, interest, dividends, rental income, and any other income earned globally on your US tax return.

For 2024, dual citizens are required to file their 2023 US tax return when they exceed the following threshold:

  • Single filers: $13,850
  • Married Filing Jointly filers: $27,700
  • Married Filing Separately filers: $5
  • Head of Household filers: $20,800
  • Self-Employed filers: $400

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How Much US Taxes Do I Have to Pay as a Dual Citizen?

The amount of US taxes you owe can vary based on several factors, including your income level, deductions, credits, and any tax treaties or provisions that may apply. The US tax rate is the same regardless if you are a US citizen or a dual citizen.

The US tax system is progressive, meaning that tax rates increase as income levels rise. For 2024, the tax brackets and rates for single filers who need to file a 2023 US tax return are as follows:

  • 10% on income up to $11,000
  • 12% on income between $11,001 and $44,725
  • 22% on income between $44,726 and $95,375
  • 24% on income between $95,376 and $182,100
  • 32% on income between $182,101 and $231,250
  • 35% on income between $231,251 and $578,125
  • 37% on income over $578,126

It’s important to note that these tax brackets and rates are subject to change, and there may be additional taxes, such as the Net Investment Income Tax, that could apply to certain types of income.

To determine your tax liability, you must calculate your taxable income by subtracting any deductions and credits from your total income. Deductions and credits can include the standard deduction, itemized deductions, and tax credits for education expenses, child care expenses, and retirement savings contributions.

Do Dual Citizens Pay Double Taxes?

As a dual citizen, there are many ways to ensure that you do not pay taxes to both countries where you hold citizenship. However, many countries have tax treaties with the United States to prevent double taxation for US citizens who are residents of another country.

These treaties typically include provisions for avoiding double taxation through mechanisms such as foreign tax credits, tax deductions, or exemptions.

For example, if you are a dual citizen of the United States and Canada and 
earn income in Canada, you would be required to pay taxes to both countries. However, the US-Canada Tax Treaty includes provisions to prevent double taxation. Under this treaty, you can claim a foreign tax credit on your US tax return for the taxes you paid to Canada on the same income, which can reduce your US tax liability.

However, it’s important to note that tax treaties can vary widely in their provisions, and not all countries have tax treaties with the US.

Furthermore, if you are a dual citizen with a self-employed income, you must pay both income and self-employment taxes. While the income tax treaty between the US and other countries prevents double taxation of income tax, it does not cover self-employment tax. Therefore, unless the US has a 
totalization agreement with the country in question, you are responsible for paying self-employment tax on your income both in your resident country and the US.

US Tax Deductions for Dual Citizens

As a dual citizen, you are entitled to claim certain deductions on your US tax return just like a normal US citizen would, which would be subject to eligibility requirements and limitations. Here are some common tax deductions that may apply to dual citizens:

  • Standard Deduction: Dual citizens can generally claim the standard deduction, which reduces their taxable income. For the tax year 2024, the standard deduction is $12,550 for single filers and $25,100 for married filers.
  • Itemized Deductions: Alternatively, dual citizens may choose to itemize deductions if they exceed the standard deduction amount. Itemized deductions may include expenses such as medical and dental expenses, mortgage interest, state and local taxes, charitable contributions, and certain miscellaneous expenses.
  • Foreign Earned Income Exclusion and Foreign Housing Deduction: If you live and work abroad, you may be eligible for a foreign housing deduction or exclusion to reduce your US tax liability. This deduction or exclusion applies to housing expenses that exceed a certain percentage of your foreign-earned income.
  • Educational Expenses: Dual citizens may be able to deduct certain educational expenses, such as tuition and fees, student loan interest, and the cost of books and supplies.
  • Self-Employment Deductions: If you have self-employment income, you may be eligible to deduct certain business expenses, such as office supplies, equipment, and travel expenses, on your US tax return.
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Need help with your US Expat Taxes?

2024 US Tax Help for Dual Citizens

Dealing with IRS dual citizenship taxes can be confusing and overwhelming, especially if you are a US expat who moved abroad at a young age or hasn’t had US income for many years. At Universal Tax Professionals, we specialize in assisting Americans living abroad, including dual citizens, in preparing their US taxes. Beyond tax preparation, our team offers tailored advice and strategic solutions to address your unique US tax situation.

Many dual citizens maintain their US citizenship with the possibility of returning to the US. This significant decision requires not only financial planning but also careful tax planning. Our team is committed to providing support and guidance to help you comprehend the potential implications of repatriation. Whether you’re seeking assistance with tax compliance or planning for your financial future, we are here to assist you every step of the way.

2024 US Expat Tax Guide

This comprehensive guide is packed with helpful information and expert advice to make sure you stay on top of your US tax obligations.

US Tax Guide for American Expats