If you are a permanent resident of the U.S. you are generally subject to U.S. income tax in the same way as a U.S. citizen. You are subject to U.S. income tax on your worldwide earnings from any source. So if you are living and working outside the U.S. you would still have to file a U.S. federal income tax return if you meet the filing requirements.
The IRS points out that your status as a lawful permanent resident of the U.S. does not change until you receive a notice from the United States Citizenship and Immigration Service that your green card has been definitively revoked or abandoned through a final administrative or judicial determination. This means that even if your permanent residency has expired or you surrender your green card, you could still be considered a lawful permanent resident.
The IRS also points out that if you surrender your green card, your tax status as a resident alien of the U.S. ends on the last day of that calendar year. But if you can establish that your tax home is in another country or you maintain a closer connection to that foreign country than you do to the U.S., your residency for tax purposes ends on the date you surrender your green card.
As long as you are considered a permanent legal resident, you qualify for the same tax exclusions, deductions, and credits that apply to U.S. citizens. So you could claim the foreign earned income exclusion or the foreign housing exclusion or deduction for your earned income outside the U.S., if you meet the requirements. You may qualify for the benefits of tax treaties that the U.S. has signed with various countries. And you could also claim the foreign tax credit if you pay income taxes in another country. You can find information on these tax benefits in IRS Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad.
If you are temporarily working outside the U.S. (generally for a period of one year or less according to the IRS) you may be able to claim a tax deduction for your work or business-related travel, lodging and meal expenses. You can find information on these deductions in IRS Publication 463, Travel, Entertainment, Gift, and Car Expenses.
If you maintain a home in the U.S. while you are out of the country, you may still be considered a resident of your state. In that case you may be subject to state income tax. You should check the state income tax requirements to see if you are considered a resident and whether you have to file a return and pay state income taxes.
You can terminate your permanent residency in the U.S. by giving notice to the Secretary of Homeland Security on Form I-407, Abandonment of Lawful Permanent Resident Status. You can present this form at a U.S. embassy or consulate, or at the U.S. Port of Entry.
If you have been a resident of the U.S. for a long time (8 out of the last 15 years according to the IRS) and you are terminating your permanent residency status, you have to file IRS Form 8854, Initial and Annual Expatriation Statement, with the IRS. According to the IRS, once you file Form I-407 with Homeland Security and Form 8854 with the IRS, you will be relieved of your obligation to file U.S. income tax returns.
U.S. income taxes are only one aspect of your permanent residency status in the United States. Any decisions you make regarding your residency status should be taken in the context of your overall individual and family circumstances and your future plans.
