This is not legal advice. Any information found here is a result of research and experience.
American Taxes: to File, or Not to File
American taxes for people living abroad can be complicated. Do I have to file? If I don’t, what are the benefits of filing my American taxes when it’s so much extra work? The United States requires that your report worldwide income for tax purposes. But the auxiliar income is a scholarship! Yes, in Spain your stipend is classified as a scholarship. The US, however, classifies it as income. According the the IRS, the penalties of not declaring foreign income can be steep:
Consequences for Evading Taxes on Foreign Source Income
You will face serious consequences if the IRS finds you have unreported income or undisclosed foreign financial accounts. These consequences can include not only the additional taxes, but also substantial penalties, interest, fines and even imprisonment.
There are exceptions, however. Just like citizens living in the US, US citizens and resident aliens living abroad have a minimum filing threshold. For the tax year of 2017, that minimum is $10,400. Below, we’re going to look closer at American taxes in different possible situations, and also where to put the income on your tax return (with photos).