Tax advice

[Yuyo]

My situation
I’ve got an extension to file in October.
I haven’t filed taxes in years mostly because my us income is under 5 grand x year.
However I had a child a few years ago who is a us citizen. And the child tax credit intrigues me.
Now I have a couple of questions.
Apparently I am eligible, but I don know if I should register in the us with permanent address ( even though I haven’t lived in the us for over 15 years.) or should I admit that I live overseas? Any risks here?
Do they really verify if I’m in the us?
I am a freelancer, and have to buy equipment and apps, can they be reimbursed?
Apparently if I say I make 14k x year as a head of household, I could get an even larger refund. However I heard that’s risky. Anyone try it?
Can I get back pay on previous year refunds? Or ctc?

I would appreciate any advice and opinions. Haven’t been able to find a decently price accountant.

Hey, I used to work in public tax, happy to add my chatter (just take everything with a grain of salt; I'm a good handful of years out of tax).

It seems like you're mixed up on two main points of "credits" and "types of tax"
In simple terms, credits reduce the amount you owe.
There are non-refundable which just reduce the calculated tax towards zero, and refundable credits that will pay out any remainder past zero.

Child tax credit is non-refundable, more or less pointless if you aren't paying income tax, there is a "additional" child tax credit version that is refundable, but that depends on more details and income levels. I did some digging through IRS reg files, and I'd have to guess they'd say no because it's foreign earned income which wouldn't count.

https://www.irs.gov/pub/fatca/int_practice_units/us-persons-abroad-child-tax-credit.pdf

Rolling off that, there are two main types of taxes going on here being "income" and "self employment".
Income tax gets all that credit bogus, standard deductions, head of household, etc.

(note standard deduction and head of household deduction just reduce the amount of income being taxed, it's not refundable.)

So, for almost everyone, there is no income tax on anything less than 12ish-k. But you are still on the hook for self employment tax.
This is pretty much the self employed version of social security.

You can take a read through this IRS article when you have a chance but I'd highlight "If you are a self-employed U.S. citizen or resident, the rules for paying self-employment tax are generally the same whether you are living in the United States or abroad."

Self-employment tax for businesses abroad | Internal Revenue Service

Self-Employment Tax for Businesses Abroad

www.irs.gov

Mind, self employment taxes kick in on anything over $400, unlike normal income tax.

Summary, going off this right now, I'd say you're in the category of supposed to be filling. No income tax, but yes possible self employment tax. Now if I had to guess, the tax owed would be so low, I'm not sure anyone will come after you for it. Only profit after expenses would be subject to the tax (fun fact, that the smart reason to file most of the time; if you don't and they they catch you, they'll send a calculated tax bill assuming $0 expenses). Lmk if I'm missing any other details.

*This is all assuming you are a US citizen or resident, if not, just leave the IRS be, there's nothing good to be had.

 

[Cordoba]

To receive earned income tax credit and to make the child tax credit refundable (able to offset self-employment tax, rather than just income tax which you may not have any) you have to be in the US for over half the year. The refundable credits are audited by the more than anything else. It is a direct question on the forms about your residency so it would be a bad idea to lie.