The 4 fiscal obligations for expats in Spain.
All U.S. Citizen 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). Due day is Thursday, April 15, 2021. You must file your 2020 tax returns by this date! Expats have an automatic filing extension until 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 before the due day on June 15th 2021, 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 anuity or SS Benefits from the U.S.A. It can be filed from April 4th to June 30th.
If an individual is considered to be a Non-Fiscal Resident of Spain, during 2020 for Tax purposes, the taxpayer will be taxed only on his Spanish source income at a 24% Tax Rate. Non-Fiscal Residents do NOT have to file Modelo 720.
If you need any further information, please do not hesitate to contact us or book a free consultation appointment.
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