US citizens are taxed on their world-wide income regardless of where they live. The tax returns of these individuals involve a complex set of rules and the use of the US/Australia treaty in order to eliminate double taxation across the two jurisdictions.
There are many US citizens that reside in Australia for a short term perhaps to set up a business or on secondment with their employer that will require US and Australian filings to be prepared.
Many US citizens also find themselves in Australia long term with dual filing requirements. Australian filing requirements are complicated and with the US interaction potentially even more so. Careful planning is needed to ensure symmetry between the two tax returns, help eliminate double tax and minimise the worldwide tax rate suffered on each source of income.
Where a US citizen has an interest in a non-US company, trust or partnership, there can be US tax consequences, additional filing requirements and in some cases, double taxation.
There is much debate around the treatment of Superannuation Funds in the US and Americans living in Australian should seek US tax advice before reorganising their Superannuation arrangements.
An individual issued with a Green Card is considered a lawful permanent resident of the US even if that person is living abroad. Green Card holders are treated as US resident for US income tax purposes subject to US tax on worldwide income. In most cases, a US tax return must be filed annually.
Careful planning and awareness of these issues can help to minimise US tax consequences.
If you would like to speak to us about any of the issues raised above please contact us.