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Also, you get Foreign Tax Credit for income tax paid abroad, which means that even if you earn more than the Foreign Income Exclusion Threshold ($100,800 in 201

Also, you get Foreign Tax Credit for income tax paid abroad, which means that even if you earn more than the Foreign Income Exclusion Threshold ($100,800 in 2015) in practice you will only pay the IRS any income tax if you live in a country where the income tax rates are lower than the US federal income tax rates, which is not common (although state income taxes sometimes make this a bit more complicated). In practice this means that US persons living abroad typically only pay US income tax if they make decent money and the local taxes are lower than those in the US and even then they only pay the difference. You still need to file your tax returns every year though.

Twirrim 10y ago
> if you live in a country where the income tax rates are lower than the US federal income tax rates, which is not common (although state income taxes sometimes make this a bit more complicated). That only applies to a subset of countries that the US has an agreement with.
- DrJokepu 10y ago
  The situation is way more complicated than what can be discussed in a HN comment. When it comes to things like social security taxes, the taxation of US-sourced income etc., double taxation treaties can help a lot, but generally speaking no tax treaty is required to claim foreign tax credit.