Do you need to file US taxes as an English teacher in China? Having taught English and filed taxes many times from China, in this guide I’d like to turn a complex answer into something easy to understand. Learn whether or not you need to file US taxes as an expat and if so, what you need to know to file.
I remember my first year teaching in China. I had no intention to file taxes back home since I already paid hefty amounts to the Chinese government.
After all, why risk owing more tax money to the US government especially since my employer didn’t report my income to the IRS?
Perhaps you’re in the same position, trying to determine whether you should even bother with taxes. So let’s start by answering the question this very important question: do you even need to bother with filing taxes?
US citizens with any income overseas must file taxes…no ifs ands or buts! On the IRS website, there is a page for foreign expats filing taxes abroad saying:
If you are a U.S. citizen or resident alien, the rules for filing income, estate, and gift tax returns and paying estimated tax are generally the same whether you are in the United States or abroad. Your worldwide income is subject to U.S. income tax, regardless of where you reside.
Coming from the IRS itself, that is as straightforward an answer anyone could ask for. If this alone doesn’t convince you to file your US taxes in China, perhaps the fact that should the IRS determine you owe the US government taxes from a previous filing period, they are subject to 3.25% interest and potential fines up to $10,000!
Hopefully we can agree that as a US citizen or resident alien, you need to file your taxes. That’s the bad news. The good news is that I’m about to walk you through step-by-step how to file your U.S. taxes while living in China.
Note: This article may contain affiliate links, which means that at no extra cost to you, I will be compensated if you decide to use some of these tools.
No matter your tax situation, you can have up to $120,000 of your China salary excluded for the 2023 tax year from federal taxes under the Foreign Earned Income Exclusion (FEIE).
What that means is if you made under US$120,000 from your teaching job in China (which as a teacher, is quite likely), that income is exempt from US taxes. You’ll still need to file your taxes, though, which means you need to fill out Form 2555 from the IRS to claim the FEIE exclusion here.
Does the FEIE mean you are off the hook entirely for paying taxes? That depends on your tax situation and the outcome of when you file. To determine if you can file by yourself or need help from a tax professional, answer the following questions:
If you answered ‘no’ to all the questions above, you shouldn’t have any problems filing on your own, provided you have the time for it.
If on the other hand, you answered ‘yes’ to some of these questions, I’d recommend reading more about what kind of tax professional you’ll need.
First things first: I am not a tax professional, so while I’m offering thoughts from my own experience, it’s best to ask your own tax advisor about your specific situation.
Should you decide you can file US taxes in China on your own, I’d jot down the following tips that can help you file:
Should you do things the old fashioned way and mail-in your return, fill out your return well in advance so that they arrive at the IRS before the deadline. By rule, mail-in returns must be postmarked by the due date and provided sufficient postage to assure delivery.
Don’t forget to also check your home state tax laws, as you may need to file taxes there as well.
Should your tax situation be more complicated than just having a single source of income or if you want peace of mind when submitting your taxes, I suggest working with a tax professional.
Should also be in need of a tax professional, I recommend using a service like 1040Abroad. The fact is that while the average tax professional could probably help you file your taxes, finding a company that specializes in expat taxes is much better.
Using a service like 1040Abroad you can:
The best part of using a dedicated expat tax service is that they take all the pain out of filing your taxes and do it all for you fast. For most services, you can expect to pay a fee of about $300-$400 for a federal return, plus more if you want to add state taxes or other additional services.
And for those who are worried about uploading sensitive documents online – I know exactly how you feel. Any respectable tax service will provide you a way to upload and download documents in a secure way, but I also recommend connecting to a good VPN to encrypt your data as you transfer sensitive documents back and forth.
As tax season picks up, remember that if you are a US expat working or traveling overseas, you must file your taxes with the IRS. Period. How you should file these taxes, however, depends on your individual situation.
If all your income came from a single employer and you have zero or few financial assets at home and abroad, chances are you can file a DIY return online. If your tax situation is more complex to where you have an LLC, investment income both at home and abroad, rental property, etc., I’d seek out a tax professional like 1040Abroad to help you file.
Remember the deadline for US expats to file is June 15! Hopefully you won’t end up owing the IRS, but if you end up owing taxes, my resources on sending money to China can help with paying back the IRS to avoid fines.
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