Paying taxes abroad?

Question

Do I need to still pay taxes in the US if i relocate to a European country and start paying taxes there?

Answer 1

Yes.  US citizens have to pay taxes on worldwide income.  There will be a tax credit granted for any taxes paid elsewhere (assuming this is a country where the US has a tax treaty- most do in Europe).  Since European taxes tend to be higher than in the US, this credit should eliminate any tax due to the IRS.

But you still need to file tax returns each year on time, or risk the IRS coming after you when you return.