US tax in Australia.
Answers for US citizens and green-card holders living in Australia. Still stuck? Book a call.
As a US citizen living in Australia, do I still have to file a US tax return?
Yes. The US taxes its citizens and green-card holders on worldwide income regardless of where they live, so you keep filing a Form 1040 every year in addition to your Australian return. You may reduce or eliminate the US tax through the Foreign Earned Income Exclusion or foreign tax credits, but the filing obligation itself does not go away just because you are resident in Australia.
How does the ATO decide whether I am an Australian tax resident?
The ATO applies four tests: ordinary concepts (do you reside in Australia based on physical presence and lifestyle); domicile (Australia is your domicile unless your permanent place of abode is overseas); the 183-day test (present in Australia for more than half the income year); and the superannuation test for Commonwealth employees. Residency is a question of fact assessed holistically, and you can be an Australian resident while remaining a US citizen taxed by the IRS.
How does the US-Australia tax treaty help me avoid double taxation?
Australia has a Double Tax Agreement with the United States that allocates taxing rights, reduces withholding tax rates, and is designed to prevent the same income being taxed twice. It lowers withholding on items such as dividends, interest and royalties, and works alongside the foreign tax credit systems in both countries. You typically claim treaty benefits via your return or by supplying a certificate of residency to the payer.
Can I claim a foreign tax credit for the Australian tax I pay?
Yes, on both sides. Australian residents who pay foreign tax on overseas income may claim a Foreign Income Tax Offset (FITO) limited to the lesser of the foreign tax paid and the Australian tax attributable to that income. On the US side, the tax you pay to the ATO can generally be claimed as a US foreign tax credit, which is what prevents most US citizens in Australia from being taxed twice on the same income.
How is my Australian superannuation treated for US tax purposes?
Australian super is straightforward locally: employer Superannuation Guarantee contributions and earnings are concessionally taxed at 15% inside the fund in 2024-25, and withdrawals from a taxed fund after age 60 are tax-free. For US purposes super is more complex, because the IRS does not automatically treat it like a US qualified retirement plan and may look through to employer contributions, earnings and the type of fund. US citizens should get advice on how their specific super arrangement is reported on the US return.
What is the Superannuation Guarantee and how much goes into my fund?
Employers must contribute 11.5% of an employee’s ordinary time earnings to their nominated super fund in 2024-25, rising to 12% from 1 July 2025. Contributions must be paid at least quarterly. Concessional (before-tax) contributions, including employer SG and salary sacrifice, are capped at $30,000 per year in 2024-25 and taxed at 15% inside the fund.
Do I have to report my Australian bank and super accounts to the US (FBAR/FATCA)?
Generally yes. US persons must file an FBAR (FinCEN Form 114) if the aggregate value of their foreign financial accounts, including Australian bank accounts and often super, exceeds USD 10,000 at any point in the year. Separately, FATCA Form 8938 may be required with your 1040 once higher thresholds are met. Australian financial institutions report account information to the ATO, which shares it with the IRS, so these accounts are visible to US authorities.
What is the Medicare Levy and do I pay it as a US expat?
The Medicare Levy is a 2% surcharge on taxable income that funds Australia’s public health system and applies to Australian residents. Many temporary visa holders who are ineligible for Medicare can claim a Medicare Levy Exemption Certificate from Services Australia for the period they were not covered. The levy is separate from US Social Security and Medicare taxes, and is not the same thing as the US payroll taxes you may have paid while working in the United States.
How am I taxed if I am a non-resident or temporary resident of Australia?
Non-residents are taxed only on Australian-sourced income and do not get the tax-free threshold, with 2024-25 rates of 32.5% up to $135,000, 37% to $190,000 and 45% above. Temporary residents on a temporary visa who are not citizens or permanent residents are taxed on Australian-sourced income but are generally exempt from Australian tax on foreign employment income, foreign investments and foreign property gains, which is a significant concession for many inbound expatriates.
How does Australian Capital Gains Tax work, and does it apply to foreign residents?
CGT is not a separate tax; net capital gains are included in assessable income and taxed at your marginal rate, with a 50% discount for individuals who hold an asset at least 12 months. Foreign and temporary residents are subject to CGT only on Taxable Australian Property such as direct real property and land-rich company interests, and the 50% discount is restricted for foreign residents on assets acquired after 8 May 2012.
What are the key Australian tax deadlines I need to know?
The Australian income year runs 1 July to 30 June. Self-lodgers must file their individual return by 31 October following year-end, while clients of a registered tax agent can usually lodge as late as 15 May the following year. This is separate from your US filing calendar, where US citizens abroad receive an automatic extension to 15 June with further extensions available, so most expats are juggling two distinct sets of deadlines.
What support does TaxSQR offer US citizens living in Australia?
TaxSQR provides specialist cross-border tax services for US citizens and green-card holders in Australia: coordinated US and Australian individual returns, residency determinations, foreign tax credit and treaty planning, FBAR and FATCA reporting, superannuation reporting questions, CGT and departure planning, and coordination with advisers in both countries under the US-Australia treaty. The goal is one joined-up filing position rather than two disconnected returns.