Double tax relief helps taxpayers avoid being taxed twice on the same income by two countries. It can take the form of:

Credits — a tax credit for foreign taxes paid, reducing domestic tax liability.

Exclusions — excluding certain foreign income from domestic taxation.

Treaties — international agreements between countries that coordinate tax rules and provide relief mechanisms.

U.S. tax residency determines if someone is taxed as a resident or nonresident. It is based on:

Substantial Presence Test — individuals physically present in the U.S. for a set number of days over 3 years may qualify.

Green Card Test — lawful permanent residents are considered U.S. tax residents.

Treaties — tax treaties can override residency status in some cases.

U.S. taxpayers may need to report foreign financial accounts and assets through:

FBAR (FinCEN Form 114) — required if aggregate maximum balances of foreign accounts exceed $10,000 at any time during the year.

Form 8938 (FATCA) — required for certain foreign financial assets over IRS thresholds.

Other Forms — additional forms may apply depending on asset type or ownership. See entity section below for descriptions related to Form 5471, 3520, etc.

U.S. taxpayers must report worldwide income, including foreign income. Key points include:

General Reporting — all income, whether earned in the U.S. or abroad, must be reported on the U.S. tax return.

Sourcing Rules — income is sourced based on factors like where services are performed, where real property is located, or the residency of the taxpayer.

Foreign Taxes — taxes paid abroad may be eligible for credits or deductions to reduce double taxation. See Double Tax Relief section above for more details.

U.S. taxpayers with interests in certain foreign entities must file special reports, including:

Form 5471 — for U.S. shareholders of foreign corporations.

Form 3520/3520-A — for certain foreign trusts, gifts, or inheritances.

Form 8865 — for U.S. partners in foreign partnerships.