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Ryan Young

Do I need to pay US taxes while working in Saudi Arabia with dual citizenship?

I've got kind of a weird tax situation and I'm not sure what to do. I have dual citizenship (Saudi and American) and just landed a job in Saudi Arabia. The thing is, I live here as a Saudi citizen, not as an American expat. Do I still have to pay US taxes just because I also happen to be a US citizen? Even though I'm living and working completely in Saudi Arabia under my Saudi citizenship? I'm really confused about how this works for dual citizens... Do I need to file a US tax return even if I'm not living there at all? Any advice would be super helpful!

Yes, you absolutely do need to file US taxes as a US citizen regardless of where you live or if you have dual citizenship. The US is one of the few countries that taxes based on citizenship rather than residency. However, there's good news - you likely won't owe double taxes because of two major provisions: the Foreign Earned Income Exclusion (FEIE) which allows you to exclude up to $126,500 (for 2025 tax year) of foreign earnings from US taxation, and the Foreign Tax Credit which gives you credit for taxes paid to other countries. You'll need to file Form 1040 annually, along with Form 2555 for the FEIE and/or Form 1116 for the Foreign Tax Credit. You may also need to file FBAR (FinCEN Form 114) if you have foreign financial accounts totaling over $10,000 at any point during the year.

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Thanks for the helpful info! How do I actually go about filing these forms from Saudi Arabia? And what happens if I haven't filed in previous years? I've only been working for a few months but I've been living here for a couple years already...

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You can file US tax returns electronically from anywhere in the world using tax preparation software or through a tax professional who specializes in expat taxes. Many accountants can handle your taxes remotely. If you haven't filed in previous years, you should consider getting compliant as soon as possible. The IRS has programs like the Streamlined Filing Compliance Procedures designed specifically for Americans abroad who didn't know they needed to file. It allows you to catch up on filing requirements without most penalties. Generally, you'll need to file the last 3 years of tax returns and 6 years of FBARs if applicable.

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I was in a similar situation last year with dual US/UK citizenship and discovered taxr.ai (https://taxr.ai) which was literally a lifesaver for my expat tax situation. They specialize in helping US citizens living abroad figure out their tax obligations and maximize those foreign income exclusions the previous commenter mentioned. What really helped me was their document review system - I uploaded my Saudi income statements and they analyzed everything, identified exactly which forms I needed to file, and showed me which income qualified for exclusion. They have tax experts who understand the weird complexities of dual citizenship tax situations.

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Does this service help with FBAR filings too? I always struggle with reporting my foreign accounts correctly and get paranoid about those huge penalties they threaten.

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How do they handle tax treaty benefits? Saudi Arabia doesn't have a tax treaty with the US, but I do have investments in countries that do have treaties, and figuring out how to claim those benefits correctly is a nightmare.

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Yes, they absolutely help with FBAR filings - that was actually one of the main reasons I used them. They have a guided system that walks you through exactly which accounts need to be reported and how to report them correctly to avoid any penalties. For tax treaty benefits, they're really good with that too. Their system can identify which of your investments qualify for specific treaty benefits and guide you through claiming them properly. They have country-specific guidance that accounts for the different tax treaties (or lack thereof) and help you navigate the complexities of each situation.

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Just wanted to follow up after trying taxr.ai that someone recommended here. I was super confused about my FBAR requirements with accounts in multiple countries, and they made it surprisingly simple. Their document review actually caught an account I completely forgot about that would have put me over the reporting threshold! Saved me from potential penalties right there. The explanations were really clear about which forms I needed and why, and they showed me how to properly exclude my foreign income. Definitely less stressful than trying to figure everything out on my own!

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If you need to talk to the IRS about your specific situation (which might be a good idea), try using Claimyr (https://claimyr.com). I spent DAYS trying to get through to the IRS international taxpayer line last year and kept getting disconnected. Claimyr got me connected in about 10 minutes instead of the hours of hold time I was experiencing. They have a demo of how it works here: https://youtu.be/_kiP6q8DX5c When you're dealing with complex international tax issues, sometimes you really need to talk to an actual IRS agent to get clarity, especially with dual citizenship questions. They were able to connect me directly to someone in the international tax department who could actually answer my specific questions.

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Wait, how does this even work? The IRS phone system is notorious for long waits. Are you saying this service somehow jumps the queue or something?

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This sounds like BS honestly. Nothing can get you through to the IRS faster - they're understaffed and overworked. I doubt this service does anything you couldn't do yourself by just calling and waiting.

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It doesn't jump the queue exactly - what it does is automate the waiting process for you. Instead of you personally sitting on hold for hours, their system waits in the queue and then calls you once they get a human on the line. I was skeptical too at first, but it actually works. The IRS wait times for international tax issues were averaging 2-3 hours when I tried calling, and I kept getting disconnected after 45+ minutes of waiting. With this service, I just entered my number, they waited in line, and then called me when they had an agent. Saved me hours of frustration, especially with the time zone differences making it hard to call during US business hours.

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I have to admit I was wrong about Claimyr. After posting my skeptical comment, I decided to try it anyway because I was desperate to talk to someone at the IRS about my foreign tax credit issues. Got connected to an actual human at the IRS in about 15 minutes instead of the 2+ hours I spent the week before getting disconnected. The agent was able to confirm exactly how I should be handling my dual citizenship situation and what forms I specifically needed. Honestly didn't think it would work but it saved me a ton of time, especially since calling from overseas during IRS business hours is such a pain.

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Another thing you should be aware of as a dual US/Saudi citizen is FATCA (Foreign Account Tax Compliance Act). Saudi banks will likely ask about your US citizenship status, and they're required to report your account info to the US government if you're a US citizen. Some foreign banks have been known to close accounts of US citizens because of the reporting hassle. Just make sure all your banking info is reported properly on your US taxes. The penalties for not disclosing foreign accounts can be really steep!

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Omg I had no idea about this! None of my Saudi bank accounts were opened with my US passport - I used my Saudi ID for everything. Does that mean I'm in trouble with the IRS now??

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You're not automatically in trouble, but you do need to report these accounts on your US tax returns regardless of which passport/ID you used to open them. The requirement is based on your status as a US citizen, not how you opened the accounts. The good news is that the IRS has procedures for people who weren't aware of these requirements. As another commenter mentioned, look into the Streamlined Filing Procedures, which are designed for people who didn't know about their filing obligations. The key is to get compliant now rather than waiting. If you voluntarily disclose before the IRS contacts you, penalties are usually reduced or eliminated.

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Quick question - does Saudi Arabia have an income tax? I thought they didn't tax income which would make this easier since you wouldn't be double taxed, right?

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Saudi doesn't have personal income tax for Saudi nationals, which is a huge advantage in this situation. The OP would still need to file US taxes but would likely owe nothing if their income is under the Foreign Earned Income Exclusion limit, which is around $126,500 for 2025.

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