E-3 Visa Tax Guide for Australian Expats in the US in 2024

As an E-3 holder, you’re required to file an annual US tax return. 

But if you file your US tax return incorrectly, you could get fined or end up paying more tax. 

Uptrend Advisory prepares and files US tax returns for Australian expats.

Our extensive knowledge of the US and Australian taxation systems gives you peace of mind and makes US tax compliance effortless and efficient for you.

  • If you haven’t filed your US taxes in three or more years, do you know how to reduce—or avoid—fines?

  • Do you know how to avoid paying double taxes? other

  • Do you know if you’re a resident or non-resident for tax purposes—and why it matters?

 

E-3 Visa Resident vs. Non-Resident Status

As an E-3 visa holder, you’re a non-resident for immigration purposes. However, the Internal Revenue Service (IRS) considers you a US resident for tax purposes if you meet the substantial presence test. It's essential to determine your tax residency status because it affects what you need to report to the IRS. 

Impact of COVID Travel Restrictions

If you resided outside the US for an extended period due to Covid travel restrictions, it may affect your residency status for tax purposes.

US Tax Basics for E-3 Visas

  • As an E-3 visa holder, you pay the same income taxes as a US citizen including federal, state, and local taxes, plus Social Security and Medicare taxes.

    The exemptions you declare on your W-4 Form reduce the taxes withheld from your employer income. Don't claim more allowances than you’re entitled to though because you may end up with a tax bill after your US tax return is processed.

  • To claim a child tax credit or the credit for other dependents or dependent children, you need:
    Social Security Number (SSN) for US-born children, or
    Individual Taxpayer Identification Number (ITIN) for overseas-born children

  • The US-Australia Tax Treaty means you don’t pay tax twice in the US and Australia. But you must report worldwide income on your US tax return. Plus you must also file a Foreign Bank and Financial Accounts Report (FBAR) to report any foreign financial accounts you hold. Finally, you might be required to file other foreign forms depending on your circumstances, so if you’re not sure drop us a line and we can review your specific situation.

    Be aware that some US states, including New York and California, don't abide by the US-Australia Tax Treaty. This means you might get taxed on Australian sourced income, depending on which US state you live in.

  • You need to file an FBAR if the total balance of all your foreign financial accounts reached US$10,000 at any time during the tax year.

    This includes bank accounts, stock portfolios, shares, and other assets. And you must list all accounts on your FBAR, including zero balance accounts and accounts that individually didn't reach the US$10,000 threshold.

  • IRS guidelines on reporting Australian superannuation aren’t clear. It's a grey area and even tax professionals have conflicting views. But the IRS can impose fines for misreporting your US tax return so it’s important to get it right.

U.S. Tax Filing on an E-3 Visa

  • The due date for filing your US tax return is April 15th for the financial year ending the previous calendar year. You can request an extension with the IRS and your due date is extended October 15th. However if you owe US taxes you must still pay them by April 15th.

  • Your spouse on an E-3D visa must also file a US tax return, and you can file a joint return or file separately.

  • You can file your US tax return yourself using:
    IRS forms, or
    Electronically using IRS or US tax preparation software.

    You can use a tax service to prepare and electronically file your US tax return. Uptrend Advisory is an Australian expat tax service based in the US, founded by an Australian expat, Jason Stoch, CPA, CA.

Changes to your E-3 Visa and Tax

  • If you go back to Australia permanently because your E-3 visa has expired, you must still file a US income tax return for the financial year in which your E-3 expired. Use the substantial presence test to check your US residency status for tax purposes.

    If you plan to cash out your 401(k) or IRA in the US, taxes and fees may apply.

  • If you change employers but remain on an E-3 visa, you need to obtain W-2 income statements from both employers when you file your US tax return.

    If you switch from an E-3 visa to another visa type, e.g., a Green Card, it's important to know how your US tax obligations are affected.

Australian Tax Topics for Expats on E-3 Visas in the US

  • Generally, you still need to file an Australian tax return if you earn income, but exceptions apply. Learn more here.

  • If you own Australian investment property you must declare rental income to the ATO by filing an Australian tax return.

    If you're planning on selling your Australian investment property, consult an Australian tax specialist. That’s because the ATO has rules around paying capital gains tax on investment properties that specifically relate to Australian expat tax obligations. Learn more here.

  • If you have a HECS/HELP debt, you need to declare any worldwide income to the ATO, regardless of your tax residency status. Learn more here.

What happens if you get U.S. Tax wrong on an E-3 visa?

You could get fined by the IRS if you’re in this situation:

  • I'm late filing my US tax return.

  • I haven't filed any US tax returns because I didn't know I needed to.

  • The IRS sent me an inquiry.

  • I had help with my US tax return but it contained errors/wasn’t filed properly.

Uptrend Advisory has helped hundreds of Australian expats navigate through issues like these for more than 10 years. 

If you're late filing your US tax return you can apply to the IRS for an extension. 

If you haven’t filed your taxes in three or more years, you may be eligible for the IRS Streamlined Procedures, an amnesty program that can reduce or eliminate your penalties.

If you’re in a difficult tax situation, you don’t need to go it alone. Get in touch and we’ll advise you on the proper way to successfully resolve your issue.

If you’re an employer sponsoring an E-3 employee, connecting them with our experienced expat tax services at the start of their employment with you, means they can avoid US tax compliance issues before they occur. Drop us a line to learn more.

UpTrend Advisory Makes US Tax Easy For Your E-3 Visa

As Aussie expats ourselves, we know how overwhelming the US tax system can be. For your convenience and peace of mind, we offer US tax preparation and filing services for E-3 and E-3D visa holders.

With our extensive knowledge of the dual US and Australian tax systems, you can trust us to prepare and file your US tax returns compliantly, accurately, and on time.

Our services include:

  • Preparation and filing of US tax returns

  • Preparation and filing of Foreign Bank and Financial Accounts Report (FBAR)

  • IRS Amnesty Program (Streamlined Filing Procedures)

  • Tax advice for Australian expats

We’re easy to reach and stay in regular contact with you, especially during tax time. This leaves you to focus on the important reasons you came here in the first place—excelling in your career and gaining valuable US experience.

Or, if you’re an E-3 sponsoring employer, by connecting your employee to our experienced tax services, you’re offering them peace of mind and efficiency for their US tax filing. That way, your valued employee can focus their unique expertise to help your business thrive rather than being distracted from worrying about their US tax compliance.