The Four Fiscal obligations for US Citizens living in Spain.

Jun 28, 2022 | IRPF Spanish Tax Return, US Tax Return 1040 / 1040NR | 0 comments

As U.S. Person (U.S. Citizens, Green Card Holders and Resident Aliens) living in Spain you have four different fiscal obligations: you are re­quired to file a U.S. Individual Tax Return every year, wherever in the world they live, repor­ting your worldwide income, even if you pay taxes in Spain. You must file (1) the Form 1040 (Federal Income Tax), if your gross income is at least $5 (married filing separately) or $12,400 (single). Tax Day for expats living abroad is June 15th, with a further extension available until October 15th, upon request, that we ask for automatically for all our clients for free.

You must also file (2) the FBAR (Foreign Bank Account Report) with the Financial Crimes Enforcement Network, FINCEN 114, with same deadlines, if the aggregate amount of all the maximum balances of your financial accounts outside the US, reach the amount of $10,000 at any point during the year 2020.

If you are resident in Spain, you will be taxed in Spain (3) on your worldwide income, no matter where it was obtained, subject to the provisions laid down in the Convention for the avoidance of double taxation between Spain and the U.S.A. (Feb. 20, 1990) and you need to report it at the IRPF (Impuesto sobre la Renta de Personas Física.): Apart from any Spanish income it includes all your U.S source of income:  e.g., a private pension, an annuities or SS Benefits from the U.S.A.

You are also required (4) to report your foreign assets that you owe at December 31st to the AEAT (Agencia Tributaria Española) in the Modelo 720, before March 31st.

If an individual is considered to be a Non-Resident in Spain, during 2021 for Tax purposes, the taxpayer will be taxed only on his Spanish source income at a 24% Tax Rate.

If you need any further information, please do not hesitate to contact us or book a free consultation appointment.


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