US Expat Taxes In Spain
Spain has an income tax treaty and a Social Security totalization agreement with the United States. It also has high progressive tax rates, a wealth tax, its own foreign asset reporting, and a special regime for new arrivals known as the Beckham Law.
Egan Tax works with US citizens living in Spain, including employees, teachers and language assistants, remote workers on the digital nomad visa, autónomos, retirees and Americans who kept property in the US.
Who This Page Is For
Egan Tax works with Americans and cross border taxpayers including:
US citizens and green card holders living and working in Spain
Remote workers in Spain employed by US or foreign companies
Americans registered as autónomo
Americans under the Beckham Law or deciding whether to apply
Teachers, language assistants and others early in their careers who want to keep funding a Roth IRA
Americans in Spain who still own US rental property or file a US state return
Americans in Spain who have missed US tax returns or foreign account reporting
The Key US Tax Issues For Americans In Spain
1. Exclusion Or Credit Is A Real Decision In Spain
Americans in Spain can use the Foreign Earned Income Exclusion, the Foreign Tax Credit, or in some cases both on different income.
3. Spain Taxes Worldwide Income, Worldwide Assets, And Wants A List
Once you are a Spanish tax resident, Spain generally taxes your worldwide income and requires foreign asset reporting above thresholds.
4. Spanish Funds Are PFICs
Spanish and other European mutual funds and ETFs are Passive Foreign Investment Companies for US purposes.
The Beckham Law From The US Side
The Beckham Law is a Spanish regime for qualifying new arrivals. It can affect Spanish taxation while the US still taxes worldwide income.
Roth IRAs, 401(k)s And Social Security
Contributing to retirement accounts while living in Spain requires careful analysis of earned income, exclusions, credits, and Spanish treatment.
US Rental Property And State Returns
Many Americans in Spain keep US property. Rental income, depreciation, state filings and Spanish reporting all need coordination.
What We Handle For Clients In Spain
- Form 1040 with Form 1116 for the Foreign Tax Credit
- Form 2555 for the Foreign Earned Income Exclusion
- Beckham Law scenario modeling
- FBAR, FinCEN Form 114
- Form 8938
- Form 8621 for Spanish and European funds
- Form 5471 for ownership of a Spanish SL
- US rental property reporting and state returns
- Roth IRA contribution eligibility
- Streamlined Filing Compliance Procedures
- Coordination with Spanish gestor or asesor fiscal
Frequently Asked Questions
Do I still file a US return if I live and pay tax in Spain?
Yes. US citizens and green card holders file on worldwide income every year.
Should I use the Foreign Earned Income Exclusion or the Foreign Tax Credit in Spain?
It depends on Spanish tax levels and your situation.
Is the Beckham Law a good idea for an American?
It depends on income, investments, and the combined US and Spanish tax position.
Related US International Tax Resources
US Expat Tax Support For Americans Living In Spain
Clients work directly with Bill Egan, CPA on Spain expat tax matters and related US international tax issues.
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