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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16547
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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I'm not sure you can help me with my question as I'm a dual

Customer Question

I'm not sure you can help me with my question as I'm a dual Aus/US citizen but living in the US
JA: The Accountant will know how to help. Please tell me more so we can help you best.
Customer: An issue came up today as I received a letter from my bank in Australia requiring I submit a FATCA document to my bank declaring that I am or am not a US citizen for tax purposes. I only became a US citizen a year ago and am confused as to whether I have to pay double tax on interest I earn in Australia. I have been living in the US for 12 years now and only just received this letter "for tax purposes or a US citizen"
JA: Is there anything else important you think the Accountant should know?
Customer: I have had a term deposit in Australia for over 12 years and did not think that I have to also pay tax on the interest in the US as I have been paying tax on it to the Australian govt this whole time. Do I have to pay double tax on it?
JA: Our top Accountant is ready to take your case. Just pay the $5 fully refundable deposit and I'll fill the Accountant in on everything we've discussed. You can go back and forth with the Accountant until you're 100% satisfied. We guarantee it.
Submitted: 8 months ago.
Category: Tax
Expert:  Megan C replied 8 months ago.

Thank you for your question -- as a US Citizen or resident, you do have to pay tax on your worldwide income.

Australia and the US do have a tax treaty -- and the US is able to tax you on the interest - up to 10%. This means you won't pay as high a rate as a US Citizen, but you are still taxed.

This is Article 11 of the tax treaty.

If the amount is significant, I would suggest amending the last three years of returns if you were a US resident or citizen during that time.

https://www.irs.gov/pub/irs-trty/aus.pdf

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