This guide explains taxes for Americans in France. Learn about your tax obligations in France and in the United States.
- Tax obligations for Americans in France
- Where do you pay income taxes?
- Do you have to file a U.S. income tax return?
- Can you file U.S. taxes on your own?
- Use a tax filing software for expats
- Get professional help to prepare U.S. taxes
- When to file from abroad?
- How to avoid double taxation?
- French taxes and social charges
- Report your foreign bank accounts to the IRS
- How to pay U.S. taxes from abroad?
- How to get your refund?
- Where to send form 1040 from abroad?
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Let’s begin from the very start.
Taxes for Americans in France: your obligations
As an American expat in France, your yearly tax obligations include:
- Filing French taxes (around May)
- Reporting your income to the IRS and possibly paying some U.S. state taxes (June 15th)
- Filing FBAR on-line (April 15th)
Where do you pay income taxes?
You are a U.S. citizen living in France. Should you pay income taxes in France? In the United States? In both countries? The answer is that you pay income taxes to the government of the country in which you are a tax resident.
You are considered a French resident for tax purposes when you live in France. If you work from France for a company located in the United States, you still have to pay income taxes in France.
If you have lived in France only for part of the year, you need to figure out your tax residency. To determine your tax residency, read (in French) Comment Déterminer son domicile fiscal (How to figure out your fiscal residency). You may need help from a tax professional if your situation is complex.
Tax treaty between France and the United States
As a U.S. citizen, your worldwide income is subject to U.S. income tax, regardless of where you reside. France and the United States have signed an income tax treaty to make sure that their citizens are not double-taxed. This tax-treaty defines the rules that apply to Americans and French people with interests in both countries regarding their income taxes. As a consequence, it is likely you will not pay federal taxes in the United States.
You have to file U.S. taxes every year to report your worldwide income.
Tax-treaties do not cover state taxes. If you used to live in California, Colorado, South Carolina or Virginia, it is likely that you are required to pay state taxes. These 4 states make it very difficult to end your residency.
These are the tax ground rules for U.S. citizens living in France. Things can get much more complicated than that depending on your situation.
Do you have to file a U.S. income tax return?
The rules for filing taxes are the same whether you live in the United States or abroad. You may not need to file taxes if your worldwide income is low. The threshold depends on your income, filing status and age. Use this IRS Interactive Tax Assistant to figure out whether or not you need to file a tax return.
Can you file U.S. taxes on your own?
If your taxes do not change much every year, you may be able to prepare your taxes on your own. A Free File Online service is available for people with income (AGI) under $73,000.
Free File Fillable Forms are also available (no income restriction) to file and send your forms electronically. You must know pretty well what you’re doing in that case because there is no software to guide you.
Use a tax filing software for expats
A great alternative is to use a tax e-filing software specifically developed for expats. Using a software is less expensive than using a CPA and your taxes will be e-filed at the end of the process. These 2 tax softwares come highly recommended by Americans living in France.
Get $20 discount when you use expatfile with the coupon code MAFRENCHLIFE20.
My experience filing with expatfile
I used expatfile for the first time this year. I ended up paying €129 (with MAFRENCHLIFE20 coupon code) for my 2022 tax return whereas I paid $400 last year for the same return using an expat tax company. I was a little nervous at first because it was my first time using a software to file U.S. taxes. The expatfile software is easy to use. You go through a questionnaire one question at a time and each page explains how to answer in great detail.
Once you’re done, you pay and you can then download your return as a pdf file. This gives you the opportunity to double check everything. In my case, I compared my return with the one I filed last year to make sure everything was pretty much identical. When you feel confident everything is good to go, sign your return and e-file right away. Done!
Using expatfile to file U.S. taxes from abroad was fast and inexpensive this year.
Get professional help to prepare your U.S. taxes
If this is your first time filing U.S. taxes from abroad, I advise you to use the help of a professional. You can hire professional help from:
- a CPA who must be knowledgable in both French and U.S. taxes
- a tax company specialized in filing taxes for U.S. expats
Americans living in France regularly use the following companies to prepare their U.S. taxes.
You start out by filing out a questionnaire that you send to the tax company. The tax company then e-file your taxes. Make sure you compare all the rates before picking the right company as prices vary greatly. Some charge by the number of forms you need whereas others have a flat rate. Get a $25 discount today when you use Taxes for Expats from this page.
When do Americans file U.S. income taxes from abroad?
Every American living abroad gets an automatic 2-month filing extension, so your filing date is June 15th. If you owe taxes though, you need to pay them by the regular deadline or else interests and penalties will be added to your balance. Being granted a filing extension doesn’t mean you’re getting an extension for paying what you owe.
If you can’t file before June 15th, you can request an extension to October 15th by filing form 4868.
How to avoid double taxation?
Foreign Earned Income Exclusion (FEIE)
FEIE allows you to exclude $112,000 for tax year 2022 from your taxable foreign earned income (not passive income). This is already that much of your income not taxable by the United States.
Employees can also claim the Foreign housing exclusion whereas self-employed can claim the Foreign housing deduction. File Form 2555 to claim the FEIE and the Foreign housing exclusion or the foreign housing deduction.
Did you know? The source of your earned income is the place where you perform the service/work. Let’s say you work for a client in Los Angeles from your home in Paris. Even if your client wires US Dollars directly into your American bank account, your income qualifies as foreign income.
Foreign Tax Credit (FTC)
Foreign Tax Credit (FTC) reduces your U.S. tax liability by counting the French income taxes you paid as a tax credit. This is usually the preferred option (over FEIE) because French taxes are often greater than U.S. taxes. File Form 1116 to claim the FTC and attach it to your U.S. tax return.
FEIE versus FTC
FTC and FEIE cannot be claimed on the same amount of income but they can be combined. You can claim FEIE on the first earned $112,000 you make (for tax year 2022) and then claim FTC on the rest of your income. One important thing to consider before deciding which deduction/exclusion to pick is that you can’t take the additional child tax credit when you claim the FEIE.
It is also worth noting that once you start claiming FEIE, you have to keep claiming it every year unless you revoke it. After revoking your choice of FEIE, you may not be able to choose it again for the next five years unless you apply for IRS approval, which is complicated and not guaranteed.
French taxes and social charges
In France, you pay social charges on most of your income. Since 2019, the U.S. government acknowledges that Contribution Sociale Généralisée (CSG) and Contribution au Remboursement de la Dette Sociale (CRDS) are actual income taxes and not social security taxes, even though they are part of “Charges Sociales” (social charges). It means that CSG and CRDS should be counted as taxes paid in your FTC. You can check the CSG and CRDS rate applied on French income on the official website from the French government.
In 2022, CSG and CRDS combined represent 9.7% of your French income. Remember to include CSG and CRDS when reporting to the IRS the amount of French taxes you’ve already paid.
Report your foreign bank accounts with your annual tax return
If the total value of your foreign financial assets meets a certain threshold, you have to report your foreign accounts with form 8938 (Statement of Specified Foreign Financial Assets). Attach the form to your annual tax return. For tax year 2022, the threshold for taxpayers living outside the United States is:
- if you are filing a return other than a joint return: more than $200,000 on the last day of the tax year, or more than $300,000 at any time during the year
- if you are married filing jointly: more than $400,000 on the last day of the tax year, or more than $600,000 at any time during the year
Some of the information required on form 8938 is the same information you already used for your FBARs. Make sure you keep your FBAR handy so you don’t have to do it all over again. This IRS comparison between Form 8938 and FBAR Requirements can help you figure out things further.
Undisclosed foreign financial assets
Failure to disclose foreign accounts comes with hefty penalties. There are several options to become compliant. Read Options Available For U.S. Taxpayers with Undisclosed Foreign Financial Assets on the IRS website. If your omission was not willful, read Streamlined Filing Compliance Procedures to know your options.
No matter the reason why you did not disclose your foreign accounts, I strongly encourage you to seek professional advice from a legal advisor.
How to pay U.S. income taxes from France?
If you have a U.S. bank account, you can pay your U.S. income taxes by check or money order payable to the United States Treasury. You can also use the Electronic Federal Tax Payment System (EFTPS) which is provided free by the U.S. department of the Treasury.
If you don’t have a U.S. bank account, you can transfer funds from your French bank account directly to the IRS by international wire transfer following IRS instructions. A much cheaper option is to use your Wise multi-currency account in US$. You can also pay with your credit or debit card.
How to get your refund?
If you have a U.S. bank account, you can receive your refund by direct deposit into a checking or saving account. If not, the IRS will mail you a check to the address you provided on your tax return. Go to Where’s my refund to check the status of your refund.
Where to send Form 1040 from abroad?
The easiest way is electronic filing or e-filing but you can also mail your U.S. paper tax return to this address if you are not enclosing a check or money order.
Department of the Treasury
Internal Revenue Service
Austin, TX 73301-0215
Use this address instead if you are enclosing a check or money order.
Internal Revenue Service
P.O. Box 1303
Charlotte, NC 28201-1303
I hope you know a lot more about taxes for Americans in France. I am not a tax professional and I strongly encourage you to do your own research. Start with the IRS Tax Guide For U.S. Citizens Abroad. If your situation is complex, hire a professional (better be safe than sorry!).