US Taxes for Expats in the Dominican Republic

Key Forms and Requirements

Expats living in the Dominican Republic must navigate complex US tax laws to avoid penalties and fines. Here are some essential forms and requirements:

Form 1116 (Foreign Tax Credit)

• Claim a credit for income taxes paid overseas, avoiding double taxation on the same income.
• Required for those with foreign earnings subject to both US and foreign taxation.

Form 2555 (Foreign Earned Income Exclusion)

• Essential for expats claiming the Foreign Earned Income Exclusion, excluding a certain amount of foreign earnings from U.S. taxation.
• Requirements include:
  • Physical presence test
  • Bona fide residence test
  • Foreign earned income limit (typically $100,800 in 2022)

Form 8938 (Statement of Specified Foreign Financial Assets)

• Report certain foreign financial assets, including bank accounts, investments, and assets held through foreign entities.
• Applies to individuals with specified foreign financial assets exceeding:
  • $75,000 on the last day of the tax year ($150,000 if married filing jointly)
  • $50,000 at any time during the tax year (if certain exceptions apply)

Form 8833 (Treaty-Based Return Position Disclosure)

• Used when a taxpayer takes a position that a US tax treaty with a foreign country overrules or modifies the provisions of the US tax law.
• Applies to taxpayers claiming treaty benefits not explicitly allowed by the US tax code.

Form 5471 (Information Return of U.S. Persons With Respect to Certain Foreign Corporations)

• Required for US citizens who are officers, directors, or shareholders in certain foreign corporations.
• Reports information about:
  • Shareholdings
  • Income and expenses
  • Tax credits and deductions