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Expat Tax Preparation: What US Citizens Abroad Need To Know

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By Taxes For Expats, the sponsor of this post
Today, it’s relatively easy to live abroad, and more and more people are choosing to do so. Technology makes it easier than ever to work from a distance. And as globalization makes the world feel smaller and more interconnected, it’s increasingly common for up-and-coming companies to place their employees overseas. Moving to a foreign country can mean lots of big changes. With so much going on, it’s easy to forget that moving abroad will also affect how they file their taxes. Just like with other big life changes — such as getting married or buying a house — changing the country you live in will also change how you file. To help you get an idea of how these changes could affect your expat tax preparation, we’ve put together a short list of the main things you need to know before filing from abroad for the first time.

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US Expat Tax Advice

Without further adieu, here are our most essential tips for filing taxes as an expat.

1. You’ll Probably Need To File Some Extra Forms

If you’re filing U.S. taxes and have over $10,000 in a foreign (non-U.S.) bank account or invested in a fund, Foreign Bank Account Reporting (FBAR) regulations require that you file a report. This rule applies not only to the owners of qualifying accounts, but also to anyone with signatory authority over qualifying accounts. Expats are also required to submit FATCA Form 8938 which reports foreign accounts and investments exceeding $200,000. Form 8938 should be filed at the same time as your tax return.

2. You May Be Eligible For Exemptions

If you’ve already paid taxes in your country of residence, you can claim a tax credit by filing Form 1116 to avoid being taxed twice. Excess credit may also be applied to future returns. If you live and work abroad, and can prove that you’re a resident of a foreign country, you can claim the Foreign Earned Income Exclusion (FEIE). The FEIE allows expats to exclude up to $200,000 of their foreign-earned income when filing their U.S. taxes. And last but not least, make sure to check out the Foreign Housing Credit, as many expats qualify to claim this credit, as well.
expat tax preparation

Filing taxes as an expat doesn’t have to be hard. Photo via Tofros/Pixabay.

3. You Still Need To File State Taxes

It’s a counterintuitive rule, and one that trips up many expats. After all, when you move abroad you’re still a U.S. citizen, so paying U.S. taxes makes sense on some level. But why pay state taxes when you’re no longer living in that state? Unless your move abroad is permanent and you no longer have any familial or financial ties to your last state of residence, you’re still required to file state taxes even when living overseas.

4. The Filing Deadline Is Later Than You Think

Because institutions and businesses in other countries follow different yearly schedules, the filing deadline for American expats is automatically extended to June 15th. If you need more time, you can also request that the deadline be extended to October 15th.
filing your taxes as an expat

These tips for filing your taxes as an expat are essential. Photo via Tofros/Pexels.

5. There’s No Need To Panic If You Haven’t Been Filing

Luckily, the federal government is aware that many expats don’t realize they’re required to file U.S. taxes until they’ve already passed the filing deadline. That’s why they’ve introduced the Streamlined Procedure. The Streamlined Procedure allows expats to file up to three years of overdue returns and up to six years of overdue FBAR forms at once without incurring any penalties. Under the Streamlined Procedure, any back taxes owed must be paid, but this generally isn’t too much of a problem since expats benefit from a wide range of exemptions.

6. Make Use Of A US Expat Tax Service

Living outside the U.S. can make your filing obligations seem far away, but the repercussions for not filing your taxes can be serious. Don’t leave it to chance: Be proactive and visit Taxes For Expats today to get started filing.

Have a tip to add about expat tax prepataion? Share below!

*A big thanks to Taxes For Expats for sponsoring this post.

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Money Abroad: How To Do Your Taxes As An Expat (For US Citizens)


About Jessie Festa

Jessie Festa is a New York-based travel content creator who is passionate about empowering her audience to experience new places and live a life of adventure. She is the founder of the solo female travel blog, Jessie on a Journey, and is editor-in-chief of Epicure & Culture, an online conscious tourism magazine. Along with writing, Jessie is a professional photographer and is the owner of NYC Photo Journeys, which offers New York photo tours, photo shoots, and wedding photography. Her work has appeared in publications like USA Today, CNN, Business Insider, Thrillist, and WestJet Magazine.

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  1. Cristina on at 9:39 am

    Other than the US, I think (People’s Republic of) China is also another country where citizens are required to file annual tax returns regardless of where they live.

    I think this also ties in with tax and immigration implications of working whilst travelling, especially when remote working is becoming a more common practice. We should be asking ourselves:
    – do I have the right to work in the country where I’m travelling?
    – if I’m an employee, does my employer know what they need to do to comply with rules in that country?

    For example, an employee spending just one day working in Canada would require the employer to register and set up payroll there. Often things go undetected by local authorities but would you or your employer be willing to bear that risk?

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