Explanation of Tax return form 1040

If your income is on US taxes and you are living abroad, fortunately your income will be reported in the same way when you live abroad as it would be if you were living in the US: via IRS Form 1040.

Good record-keeping throughout the year is essential for the accurate preparation of your US tax return– no matter what form you are filling out. This is particularly important when it comes time to report all of your foreign earned income, because leaving anything out could get you in trouble with the IRS. Note that income must be reported regardless of where it was earned, what foreign taxes were already paid on it, and what currency it was earned in.

The following types of income are going to be included on form 1040 for your US expat taxes:

• Wages and salaries
• Taxable interest – Schedule B
• Ordinary dividends
• Refunds , credits, or other offsets and local income taxes
• Alimony received
• Business income (or losses). – Schedule C or C-EZ
• Capital gains (or losses) – Schedule D
• Other gains (or losses) – Form 4797
• IRA distributions
• Pensions and annuities
• Rental real estate, royalties, partnerships, S-corps, and trusts – Schedule E
• Farm Income
• Unemployment compensation
• Social security benefits
• Other income

If your income is earned from any of the forms listed above, then there is a need to give documents to explain the source of earning and to prove that the amount reported under US tax return is genuine.

You are also going to need to gather information about applicable deductions that need to be reported on your US expat taxes. These include:

• Educator expenses
• Certain business expenses – Form 2106
•  Health savings account deductions – Form 8889
• Moving expenses – Form 3903
• Penalty on early withdrawal of savings
• Alimony paid
• IRA deductions
• Student loan interest
• Tuition fees paid
• Other deductions

You should receive many of these documents from their respective distributors throughout the calendar year, but it is important to keep everything organized so that filling out your 1040 is as easy as possible.