Living down under has its advantages—good weather, free healthcare, and an ample supply of beaches. Yet for American residents, living overseas doesn’t necessarily mean saying goodbye to the IRS. As an Australian resident who is a U.S. citizen or green card holder, you still have to file U.S. tax returns, report foreign accounts, and deal with cross-border issues—such as superannuation and double taxation risk.
This guide will walk you through how to file American expat taxes in Australia, what to do if you’re behind on your filings, and how superannuation fits into the picture.
Why you still have to file U.S. taxes abroad
America is one of the only nations that taxes citizens, rather than residents. This requires you to report globally earned income to the IRS annually, even if you’re completely taxed in Australia and have not lived in America for decades.
Even if you have no debt, the filing obligation still stands—and avoiding it may result in penalties and hassles down the line (particularly if you ever plan to renounce citizenship or establish financial accounts).
How to file U.S. taxes from Australia
Filing overseas is the same as filing from home with a few key variations.
Step 1: Accumulate income and tax information
You will require:
- U.S. and Australian income reports (e.g., PAYG summaries, interest, dividends)
- ATO tax return information
- Superannuation contributions and statements
- Bank account balances for FBAR
Step 2: File your U.S. tax return (Form 1040)
Include:
- Wages or salary from employers in Australia
- Investment income
- Rental income (if any)
- Any U.S.-sourced income
- You may file online, by mail, or through an expat tax professional.
Step 3: Apply tax credits or exclusions to avoid double taxation
Two important tools minimize or eliminate U.S. taxation:
- Foreign Earned Income Exclusion (FEIE)
Use Form 2555 to exclude up to $126,500 (2025 estimate) of earned income. - Foreign Tax Credit (FTC)
Use Form 1116 to claim a credit for income tax paid to the Australian Taxation Office. This is often better for those with investment income or who don’t qualify for the FEIE.
What to do if you’re late on filing
If you’ve just discovered your U.S. tax filing obligations, don’t panic.
Use the streamlined filing compliance procedures
The IRS offers a no-penalty option for expats to get up to date
- 3 years of tax returns
- 6 years of FBARs (foreign bank account reports)
In order to qualify, you must attest that your non-filing was non-willful (i.e., you didn’t realize you were required to file).
This program is a lifeline for U.S. expats in Australia who are in arrears—but it won’t last forever.
Reporting superannuation: What expats need to know
Australia’s compulsory superannuation scheme often creates tax complications for American citizens. While Australia treats it as a tax-deferred retirement account, the IRS does not.
Here’s what to know:
- Employer contributions may be taxable in the U.S.
- Growth inside the super fund may need to be reported yearly
- The fund might contain PFICs (passive foreign investment companies), triggering additional forms and taxes
You may need to report your super on:
- FBAR (FinCEN Form 114) if accounts are over $10,000 USD
- FATCA (Form 8938) if your foreign assets equal or exceed threshold
- Potentially Form 3520/3520-A if the IRS considers your super to be a foreign trust
Consulting a specialist who understands the U.S. tax implications of Australian superannuation is highly recommended.
People also ask (PAA)
1. Do I need to pay U.S. tax while I am living in Australia?
Yes, though in most cases, the Foreign Tax Credit or FEIE helps offset any U.S. tax liability owe anything—but you still have to file.
2. How do I report my superannuation?
You might have to report your super on FBAR, FATCA, and maybe as a foreign trust. It will depend on how the IRS decides to handle your particular account.
3. What if I don’t file U.S. taxes while overseas?
The IRS can impose late filing penalties, suspend passports in egregious situations, and withdraw access to streamlined programs in the future.
4. Do Americans need to pay U.S. tax on income earned in Australia?
Yes, but it can be excluded or credited with IRS tools. You’re still required to report it if you have no tax to pay.
Final thoughts
It can seem intimidating to file American expat taxes in Australia—but with the proper information and guidance, it’s possible. The secret is understanding your requirements, filing in a timely manner, and learning how to report special items such as superannuation.
If you’ve fallen behind, initiatives like the Streamlined Filing Procedures provide an opportunity to get it back on track penalty-free. And if you’re new to life Down Under, having your tax strategy sorted out in the beginning can save you decades of worry.
