Does anyone know how being a US citizen and also becoming an Australian permanent resident or citizen affects your income taxes? Do you pay taxes to both countries? Can you deduct one countries taxes from the taxes you pay to the other country?
US Citizens and permanent residents have to file taxes every single year regardless of how much money is made. But I think that you don't pay any taxes (to the US) if your income is kept beneath a certain level, however, if you go over the amount, you wind up owing both countries. (Not a very nice situation)
You must file a US resident tax return every year, even if you are living abroad as you are taxed on your worldwide income (not just your US-based income). However, you get what's called a "foreign earned income exclusion" -- if your foreign (i.e. Australian) income is at or below a certain amount (last year it was $92,900) you are not required to pay tax on that income. Also, you may be able to deduct some housing costs from your taxes.
Also, the US and Australia have a tax treaty, which may allow you to deduct other expenses as well. It would be advisable to get in touch with an accountant who is familiar with tax laws as it pertains to expats.