First job abroad: do you need to file U.S. taxes?

You have started your first job outside the United States, someone has mentioned that Americans have to file wherever they live, and you are trying to work out whether that means you, now, at this salary.

The threshold rule itself is on the page that owns it. This page is about the part that page assumes you already know: which year you are asking about, and which number you are supposed to be comparing. Almost everyone gets one of those two wrong first, and both errors point the same way — toward believing nothing applies.

Which year are we even talking about?

The U.S. tax year is the calendar year, whatever your country's tax year does. You report a calendar year on a return filed the following spring.

Gross, not what reaches your bank

This one costs people the most. U.S. thresholds are measured on gross income — your salary before income tax, before social contributions, before pension deductions, before anything your local system takes out.

In most European countries the gap between the two is large. A salary that looks comfortably below a threshold measured at the bank end can be above it measured properly. If you are checking whether you are over a line, take the figure from your annual salary statement, not from your account.

Do not multiply your monthly salary by twelve

If you started mid-year, your income for that calendar year is what you actually received in it. A first job beginning in September produces roughly four months of pay in that year, not twelve.

Worked example, and it is a made-up one: someone aged 23 starts their first job in Italy in September on about €1,300 a month gross. For that calendar year they earned roughly four months of salary. Annualising to €15,600 would compare the wrong number against the threshold. The following year — the first full year — is a different calculation with a different answer, and it has to be run separately.

What a small salary does not settle

Being under the income-filing threshold for a year is a real answer to one question. It is not an answer to these:

• Self-employment. Freelance or side income has its own much lower trigger, and it is a separate test from the salary threshold. A modest amount of freelance work alongside a small salary can require a return when the salary alone would not.
• Accounts. The FBAR turns on the combined peak balance of your non-U.S. accounts during the year, not on income. A student account, a current account and a savings account are added together, and a year with almost no income can still be a reporting year.
• Being claimed as a dependent. If a parent can claim you, a different and lower threshold applies to you.
• Withheld tax you would get back. Filing when you are not required to is sometimes worth doing, because it is how a refund is claimed.

The years before the job

Most people asking this have some student years behind them. Those years are evaluated separately, each against its own threshold, and a year with no income generally required no return.

That matters more than it sounds. "I have never filed" is not the same as "I am behind": if nothing was required, there is nothing to catch up on, and no catch-up procedure is called for. A student year with a small part-time job, or with a foreign account that crossed the FBAR line, might be a different story — but that is a year-by-year question, not a blanket one.

Will I actually owe anything?

Filing and owing are different questions, and for a salaried person in an ordinary-tax country the answer to the second is frequently no. The Foreign Tax Credit gives credit for the tax you already paid where you live, and the Foreign Earned Income Exclusion can exclude a substantial amount of salary — but the exclusion only exists if you claim it on a filed return, which is a reason to file rather than a reason not to.

The free and cheap options, honestly

If your situation is genuinely simple — one salary, no foreign funds, no self-employment, no accounts near the FBAR line — you may not need to pay anyone, and we would rather say so.

• IRS Free File offers free federal preparation and filing for taxpayers under an income limit, including from abroad. Check the current year's limit and which partners accept a foreign address.
• The FBAR is filed free, directly on FinCEN's own e-filing site. Nobody needs to charge you to submit it.
• Our own free tools cover the threshold and FBAR questions with no account and no email.

Where the paid work earns its price is when there are several years to sort out at once, foreign funds in the picture, or a genuine question about which forms apply. A single simple year is usually not that.

What to keep, starting now

The cheapest thing you will ever do for this is keep records from the beginning rather than reconstructing them later.

1. Your annual salary statement for each year — the gross figure, in local currency.
2. Your local tax assessment, which is the cleanest evidence of foreign tax paid for credit purposes.
3. The highest balance each of your accounts reached during the year. Banks rarely make this easy to find afterwards.
4. A note of when you arrived, if you moved mid-year. It decides which reliefs are available.