Double taxation for US citizen in Ireland

D

dono

Guest
I recently returned to Ireland from the US and now hold both an Irish and American passport. I understand I need to file US tax returns for as long as I hold the US passport but want to get a better idea of my tax exposure from (1) standard income and (2) capital gains.

Is there a [dollar] limit to which I am sheltered from double taxation based on the current bi-lateral tax law agreements between Ireland and the US, or do I need to pay tax in both Ireland and the US once I go over a certain income ? (I remember reading somewhere that anything over 80K dollars was subject to tax in both Ireland and the US ... is this correct ?)

If my income includes capital gains from investments elsewhere, will the capital gains tax paid in Ireland satisfy Uncle Sam ?

Any help in this regard would be very much appreciated.
 
If your annual income is under about $80,000 you don't have to pay taxes to the US. You're still required to file, but you just fill out a form 2555 indicating your Irish income (no evidence necessary) and you're fine. This has nothing to do with bilateral agreements - it's standard for US citizens living abroad.

I don't know about any such agreements that might apply in the event you go over that threshold, or about capital gains.

I always file my US tax returns, but I've known a few dual citizens resident abroad who don't bother, and they've never had a problem. Unless you're stinkingly rich the IRS probably isn't going to bother with you.
 
If you file a US tax return declaring your Irish income, you should receive a credit for any Irish tax paid.

US returns are not a simple process for non-US residents, and I would suggest you get professional advice in this regard.

The US are cracking down on US non-filers who are resident abroad, so I would advise you to comply with your filing requirements.
 
Try the 2555EZ if you satisfy its requirements - the easiest method if you live over here.

Its a pain but it is necessary if you ever plan to go back there - if just to leave that door open even slightly. I sold some US stock one year when I hadnt bothered to file taxes and got a tremndous bill from the IRS - they basically looked at all the transactions (mutliple buying and selling of stock) as all profit - once a filled the 2555 ez and a letter explaining the stock it was fine.


The 80K$ income limit is also per person - so if your wife is earning your combined income can be 160$K.
 
Generally your Irish taxes will negate any US taxes due. It can be difficult to get the timing right if you're self employed though, as US tax returns are due 6 and a half months before the corresponding Irish return, so if you're claiming tax relief in the US on taxes paid in Ireland you'll have to get the Irish one in early, or at least know the numbers.
 
Thanks guys

Can you recommend an accountant in the Dublin area that has experience with these matters ? I am looking at other investments that may complicate my situation further.
 
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