MarilynG1
Expert Alumni

Deductions & credits

Yes, the IRS taxes you on all your income; whether earned in the US or a foreign country, if you live in the US. 

 

The only difference is that you can get a Foreign Tax Credit for tax paid to a foreign country on your income, so that you are not taxed twice on the same income (by the IRS and the foreign country).

 

Now those who live in a foreign country and earn foreign income (but are US citizens required to report their income to the IRS) may qualify for a Foreign Earned Income Exclusion (as they have to also maintain a home in the foreign country), that excludes part of their income from US taxes.

 

Click this link for more info on Foreign Earned Income.

 

 

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