U.S. Expat Taxes For Americans Living In Ireland

Hugo Lesser

It has been estimated that there are several thousand Americans living in Ireland.

Living in Ireland is an incredible experience for a number of reasons, including the friendly locals, the incredible landscapes, the charming culture, not to mention easy access to the rest of Europe. As an American expatriate living in Ireland though, what exactly do you need to know regarding filing U.S. expat (and Irish) taxes?

All U.S. citizens and green card holders who earn a minimum of around $10,000 (or just $400 for self-employed individuals) anywhere in the world are required to file a U.S. federal tax return and pay taxes to the IRS, regardless of where in the world they live or their income is generated.

The good news is if you are paying income tax in Ireland, there are various exclusions and exemptions available to prevent you paying tax on the same income to the IRS too.

U.S. Taxes – What You Need To Know

If you earn over U.S. $10,000 (or just $400 of self-employment income), wherever the income originates in the world you have to file IRS form 1040. While any U.S. taxes due are still due by April 15th, expats get an automatic filing extension until June 15th, which can be extended further on request until October 15th.
If you have overseas 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 to declare them.

If you had a total of at least U.S. $10,000 in one or more foreign bank and/or investment 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.

If you pay income tax in Ireland, there are several exemptions that allow you to pay less or no U.S. income tax on the same income to the IRS. The main one is the Foreign Earned Income Exclusion, which lets you exclude the first around US $100,000 of foreign earned income from U.S. tax if you can prove that you are a Irish resident, and the Foreign Tax Credit, which gives you a $1 tax credit for every dollar of tax you’ve paid in Ireland. These exemptions can be combined if necessary. Remember though that even if you don’t owe any tax to the IRS, if your income is over U.S. $10,000 (or $400 if you’re self-employed) you still have to file a federal return.

The U.S. and Irish governments share taxpayer info, and Irish banks pass on U.S. account holders’ account info to the IRS, so it’s not worth not filing or omitting anything on your return. The penalties for incorrect or incomplete filing for expats are steep to say the least.

If you’re a U.S. citizen, green card holder, or U.S./Irish dual citizen, and you have been living in Ireland but you didn’t know you had to file a U.S. tax return, don’t worry: there’s a program called the IRS Streamlined Procedure that allows you to catch up on your filing without paying any penalties. Don’t delay though, in case the IRS comes to you first.

“Irish residents who have no income or gains other than employment income subject to withholding Pay-As-You-Earn (PAYE) tax are generally not required to submit a tax return.” – KPMG

Irish taxes – What You Need To Know

Irish residents are taxed on their worldwide income at 20% for the first 33800 Euros (around $35,000), and at 40% on their income above this figure. Residents also pay a social security tax (called Universal Social Charge) of between 1% and 8%, depending on their income.

Foreigners living in Ireland are considered a resident for tax purposes if they spend over 183 days a year in Ireland, or, if they spend 280 days in Ireland in two consecutive years they are considered a resident for tax purposes in the second year.

The Irish tax year is the same as the U.S., which is to say the calendar year. If you’re employed by a Irish firm, they will deduct tax at source before paying you. Tax returns are due by October 31st. The Irish tax authority is simply called Revenue.

We strongly recommend that if you have any doubts or questions about your tax situation as a U.S. expat living in Ireland that you contact a U.S. expat tax specialist.

At Bright!Tax, we have clients in over 150 countries worldwide. US expat tax is all we do and we are very good at it. If you have any questions regarding your personal situation, don’t hesitate to contact us and we’ll be happy to help.

With clients in over 150 countries, Bright!Tax is a leading provider of US tax services to the estimated 9 million Americans living abroad. I’m responsible for client experience, communications, and branding. Since I joined, turnover has been growing at a rate of 80% per annum.

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4 comments on “U.S. Expat Taxes For Americans Living In Ireland

  • What efforts have you been making to help America switch to residency-based taxation? America and Eritrea are the only two nations in the world which criminally harm the unrepresented abroad with double-taxation.

  • I’m Canadian, and unfortunately I married a US born person (I still love her though). However, living with all this US crap, I realize that she really is hardly free, and should have just stayed in her homeland where she still could pretend that she’s free. That national anthem is a lie!
    This article fails to make any mention of all the other pitfalls of this unfortunate birthplace, such as trying to save for your children’s education, enjoying local tax deferrence schemes of your host country, paying capital gains on your principal residence, and trying to have a normal investment account where you live, the list goes on and on…..if banks in your country of residence will even have you as a client.
    Many who have permanently left have paid the US$2350 and faced the tax rape to buy their freedom. It’s called “renounce and rejoice.”

  • If there are “9 million Americans living abroad” how does itvhappen that only 700,000 US tax returns are filed from outside thev50 states?

    And I might add that many Irish citizens like myself might, or might not, be American citizens. Without applying for a US passport we’ll never know: and why would I do that? (State Dept regulations — 7 FAM & 9 FAM — allow doubtful but possible citizens who refuse to prove their cases to visit the USA with foreign passports). Birth abroad creates a “presumption of alienage”. And to prove citizenship one has to prove qualifying residence or presence of patent(s).

    So: if one is not known to thevUS Government and may or may not be a citizen why stir up the hornet’s nest of FATCA, PFIC, OVDP, Stresmlined, 3520, 3520A, doublevtaxation, capital gains tax on your home and all the rest?

    Many Americans abroad have come to hate the USA. For good reason, Ivshoukd think.

  • Holly makes an interesting in writing:

    “If there are “9 million Americans living abroad” how does it happen that only 700,000 US tax returns are filed from outside thev50 states?

    And I might add that many Irish citizens like myself might, or might not, be American citizens. Without applying for a US passport we’ll never know: and why would I do that? (State Dept regulations — 7 FAM & 9 FAM — allow doubtful but possible citizens who refuse to prove their cases to visit the USA with foreign passports). Birth abroad creates a “presumption of alienage”. And to prove citizenship one has to prove qualifying residence or presence of patent(s).”

    “Citizenship” is NOT defined in the Internal Revenue Code. The law of U.S. citizenship is governed by a completely different area of U.S. laws (Immigration and Nationality Act) and by the 14th Amendment of the constitution.

    Although the Internal Revenue Code does NOT define who is a U.S. citizen, it does (S. 7701(a)(50)) make it clear that there are tax consequences to relinquishing U.S. citizenship.

    Clearly (unless you are living in the USA or want to live in the USA), U.S. citizenship (for reasons given by Holly) is a liability.

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