If you’re a US citizen in the Dominican Republic, you likely still have US filing obligations. This quick guide explains the basics—plus when to use the Foreign Earned Income Exclusion (FEIE), the Foreign Tax Credit (FTC), and required disclosures— and how our team can help. Explore our Tax Preparation Services.
1) Do I Still File a US Return?
Yes—US citizens are taxed on worldwide income. You may qualify for special expat provisions. For individuals, see Personal Tax Preparation; for freelancers/business owners, see Business Tax Preparation.
2) FEIE (Foreign Earned Income Exclusion)
If you meet the Physical Presence or Bona Fide Residence tests, you may exclude up to an annual limit of foreign earned income and claim a housing exclusion in some cases. Choosing FEIE vs. FTC can affect future years—plan carefully with our Business Consulting.
3) Foreign Tax Credit (FTC)
If you pay Dominican income tax, the FTC can offset US tax on the same income. Often you compare FEIE and FTC to see which yields the best result. We model both strategies during Tax Prep & Planning.
4) FBAR & FATCA Disclosures
Many taxpayers must file FBAR (FinCEN 114) for non-US accounts and, in some cases, FATCA Form 8938. Penalties can be high—our team ensures the right forms get filed and retained with Bookkeeping & Recordkeeping.
5) Self-Employment, Rental & Business Income
US self-employment taxes may still apply. Rental income from DR property is generally reportable to the US. We coordinate filings and basis tracking via Bookkeeping and Outsourced CFO Services.
6) State Tax “Residency” Considerations
Some states keep you on the rolls if ties remain (home, license, voter reg). We evaluate break-residency steps during Consulting.
7) Late or Missing Filings
If you missed prior FBARs or returns, options may exist to get compliant. Our IRS Representation team handles notices, penalties, and reasonable-cause letters.
Frequently Asked Questions (FAQs)
Do I have to pay US tax if I already pay tax in the DR?
Possibly not on the exact same income—both the Foreign Earned Income Exclusion (FEIE) and the Foreign Tax Credit (FTC) have the potential to significantly reduce or even completely eliminate your US tax liability. The actual impact depends on the specific amounts involved as well as the particular type of income you earn. We thoroughly analyze and carefully run both scenarios during our detailed and comprehensive Tax Preparation process to determine the absolute best tax outcome tailored specifically for you.
What records should I keep?
Proof of travel days and residency documentation, Dominican tax receipts and filed tax returns, detailed bank and interest statements, housing expenses, and comprehensive business records are essential for thorough financial management. We establish straightforward and efficient organizational systems through our specialized Bookkeeping services to help you manage all these important documents with ease and accuracy. Our approach ensures that every piece of documentation is carefully categorized and easily accessible, making your financial record-keeping process smooth and stress-free.
Can you work with me if I’m in the DR?
Yes—our dedicated team of highly experienced Enrolled Agents (EAs) and Certified Public Accountants (CPAs) proudly serves a wide range of clients not only throughout the entire United States but also internationally, including those who are based in the Dominican Republic. We make use of secure, state-of-the-art online collaboration tools designed to safeguard your sensitive information at all times, providing you with peace of mind. Additionally, we manage all filing processes electronically, ensuring that everything is handled efficiently and conveniently for you, no matter where you are located in the world.
Get US–DR Tax Help from Enrolled Agents & CPAs
Henriquez Accounting & Tax Services helps US citizens in the Dominican Republic with tax preparation, IRS representation, bookkeeping, and tax planning/consulting. Schedule a Consultation
Leave a Reply