Introduction
For many Americans, Australia is a dream destination with its sunny climate, thriving cities, and strong economy. But before you pack your bags, there’s an important reality to face: the IRS doesn’t let go. As a U.S. citizen, you must continue filing U.S. taxes no matter where you live.
To help you navigate the complexities of US Tax in Australia, here are answers to the most common questions expats ask in 2025.
Frequently Asked Questions (FAQs) About US Tax in Australia
1. Do I still have to file U.S. taxes if I live in Australia?
Yes. U.S. citizens and Green Card holders must file annual U.S. federal tax returns, reporting worldwide income—even if you live permanently in Australia.
2. Will I be double-taxed in both the U.S. and Australia?
Not necessarily. Thanks to the U.S.-Australia Tax Treaty, you can often avoid double taxation by using tools like:
- Foreign Earned Income Exclusion (FEIE): Exclude up to $126,500 of foreign income (2024 figure).
- Foreign Tax Credit (FTC): Offset U.S. taxes with Australian taxes paid.
- Tax Treaty Benefits: Clarify which country has taxing rights on certain income types.
3. What is the tax filing deadline for U.S. expats in Australia?
- U.S. tax return deadline: April 15, with an automatic extension to June 15 for expats. You can request an additional extension until October 15.
- Australian tax year: Runs from July 1 to June 30, with tax returns usually due by October 31.
This difference in tax years can complicate reporting, so many expats rely on professional assistance.
4. Do I need to report Australian bank accounts to the IRS?
Yes. If the total balance of your foreign accounts exceeds $10,000 at any point in the year, you must file an FBAR (FinCEN Form 114).
Additionally, under FATCA (Form 8938), you may need to report foreign assets if their value exceeds:
- $200,000 for individuals living abroad
- $400,000 for married couples filing jointly abroad
5. How does superannuation (Australia’s retirement system) affect U.S. taxes?
Superannuation is complex. The IRS does not clearly classify it as a pension, trust, or foreign retirement plan. As a result, U.S. expats may face reporting requirements and possible taxation on contributions or earnings.
It’s wise to consult a tax professional familiar with both U.S. and Australian tax rules.
6. Do I pay U.S. social security while working in Australia?
Generally, no. The U.S.-Australia Totalization Agreement ensures that workers don’t pay social security taxes to both countries. Instead, contributions go to the country where you’re working.
7. What income is taxable by both the U.S. and Australia?
- Employment income
- Self-employment income
- Investment income (interest, dividends, rental income, capital gains)
The tax treaty often determines which country gets primary taxing rights, but you must still report worldwide income on your U.S. return.
8. What happens if I don’t file my U.S. taxes while living in Australia?
Failure to file can result in:
- Hefty IRS penalties
- Interest on unpaid taxes
- Loss of eligibility for future amnesty programs
- Possible passport complications
The IRS offers the Streamlined Filing Compliance Procedures, which allow expats who’ve fallen behind to catch up without harsh penalties.
9. How do exchange rates affect my U.S. tax return?
All foreign income must be converted into U.S. dollars using the IRS-approved yearly exchange rate or the rate from the date of the transaction. Many online tax platforms handle this automatically.
10. Is online filing an option for U.S. expats in Australia?
Yes. Many IRS-authorized platforms now support expats worldwide, including those in Australia. These services often include FBAR reporting and are more affordable than hiring a traditional CPA.
Conclusion
Living in Australia comes with great opportunities—but it doesn’t free you from U.S. tax responsibilities. By understanding the rules around US Tax in Australia, you can stay compliant, avoid penalties, and make the most of tax treaty benefits.
The bottom line: U.S. expats in Australia should stay proactive, keep good records, and consider professional or online expat tax services for a smooth filing experience.
