US Expat Tax Filing in Australia: A Complete Guide

Emigrating to Australia doesn’t mean you can leave your US tax responsibilities behind. As a US citizen or Green Card holder living in the land down under, you must still file your annual US tax return—and in many cases, Australian taxes as well. This can cause confusion, particularly when trying to prevent double taxation.

This guide explains how US expat tax filing in Australia works, including what forms you’ll need, how the tax treaty helps, and how to stay compliant in both countries.

Do US Expats Living in Australia Have to File US Taxes?

Yes. The United States taxes its citizens and permanent residents on their worldwide income, regardless of location.

That means if you’re:

• Living in Sydney and employed locally,
• Working remotely from Melbourne, or
• Running a business in Brisbane,

…you must still file a federal tax return with the IRS.

You may also need to report foreign financial accounts and assets, and in some cases, pay additional US taxes depending on your income and investments.

Primary US Filing Requirements for Expats in Australia

Here are the main IRS filing requirements you need to know:

1. Federal Income Tax Return (Form 1040)

If your income exceeds the filing threshold ($13,850 for single filers in 2025), you must file a US tax return. This includes:

• Wages
• Self-employment income
• Pensions
• Rental income (even if already taxed in Australia)

2. Foreign Earned Income Exclusion (FEIE – Form 2555)

You can exclude up to $126,500 (2025 limit) of foreign-earned income if you meet either:

• The Physical Presence Test (330 days abroad), or
• The Bona Fide Residence Test (establishing residency in Australia).

3. Foreign Tax Credit (FTC – Form 1116)

If you pay taxes in Australia, you can generally use the FTC to offset your US tax liability. This is especially useful for income not covered by FEIE, such as investment income.

4. FBAR (FinCEN Form 114)

If your combined foreign bank account balances exceed $10,000 USD at any point during the year, you must file an FBAR electronically.

5. FATCA (Form 8938)

Required if your foreign assets exceed certain thresholds. For example, single filers must report if they hold over $200,000 USD in foreign assets at year-end (or $300,000 at any time during the year).

Australian Tax Residency Rules

Your tax liability in Australia depends on your residency status as defined by the Australian Tax Office (ATO).

You may be considered an Australian tax resident if:

• You live and work in Australia long-term
• You own or lease a residence in Australia
• Your spouse and children reside in Australia
• Your ties to the US are minimal

Once deemed a tax resident, you’ll be taxed on your worldwide income, similar to the US system.

How the US–Australia Tax Treaty Helps

Thankfully, the US and Australia have a tax treaty to prevent double taxation. It provides:

• Allocation of taxing rights: Certain income (like pensions or dividends) is taxed in only one country or at a reduced rate.
• Foreign Tax Credit mechanism: Taxes paid in Australia can be credited against US taxes.
• Savings clause: Unfortunately, the US can still tax its citizens despite treaty provisions—but credits still apply.

Superannuation and US Tax

Australia’s superannuation system is complex under US tax law.

• Employer contributions are generally not deductible in the US.
• Investment growth inside a super fund may be taxable by the IRS annually, depending on structure.
• Distributions may be taxable in the US, even if tax-free in Australia.

???? Tip: Have a cross-border tax expert review your superannuation to ensure proper reporting.

Preventing Double Taxation

The main tools available include:

 

Tool	Best For	Form Required
FEIE	Wages, salary	Form 2555
FTC	Investment income, other non-excluded income	Form 1116
Tax Treaty Benefits	Pensions, dividends, Social Security	Form 8833 (sometimes required)

 

Most expats use both FEIE and FTC together to reduce or eliminate US tax liability.

Common Mistakes by US Expats in Australia

• Not filing because you already pay Australian taxes
• Forgetting to report superannuation accounts
• Missing FBAR or FATCA requirements
• Overlooking PFIC rules on Australian mutual funds
• Using standard tax software (like TurboTax) that isn’t designed for expats

Filing Deadlines

 

Filing Requirement	Deadline (if abroad)
Federal tax return	June 15 (automatic extension)
FBAR	April 15 (automatic extension to Oct 15)
Extension (Form 4868)	Until October 15

 

???? You can request an additional extension to December 15 with a written explanation.

Do You Need a Tax Professional?

Consider working with a tax advisor if you:

• Own property or investments in both countries
• Operate an Australian business
• Are unsure how your superannuation is treated
• Want to avoid costly mistakes or penalties

An experienced US expat tax professional in Australia can save you time, stress, and money.

FAQs: US Expat Tax Australia

Do I pay both Australian and US taxes?
 Yes—but you can usually avoid paying twice through FEIE, the FTC, or treaty benefits.

What if I’ve never filed US taxes while living in Australia?
 You may qualify for the Streamlined Foreign Offshore Procedures, allowing you to catch up without penalties.

Does my Australian spouse get affected by my US taxes?
 Only if you file jointly or hold joint bank accounts that must be reported.

Are crypto and stocks in Australia reportable to the IRS?
 Yes. Investment accounts and gains must be reported, and FBAR/FATCA rules may apply.

Can I claim the Child Tax Credit while in Australia?
 Yes, if your child has a valid Social Security Number and you meet the earned income requirements. Refundable amounts may be limited overseas.

Key Takeaway

Filing US expat tax in Australia isn’t optional—but it doesn’t have to be overwhelming. By applying the right exclusions, credits, and treaty benefits, you can stay compliant and avoid double taxation.

???? Bottom line: Staying on top of both US and Australian tax obligations now means fewer headaches later.