Tax for Expats – Expat Tax Preparation: When and Where to File

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Globalization has disintegrated boarders between countries and made them disappear, making the world smaller. Undoubtedly, this has increased the number of workers who choose to move overseas and become expats, but how does this work when it comes to tax for expats?

The increase in American expats hasn’t made the process easier; in addition to the demands of moving to another country to work, United States tax laws continue to cause tax stress for expats. Although tax laws for expats has been around for years, its much easier for the IRS to enforce them because of tax systems and banking. If you’re an expatriate working in another country, if you don’t follow tax for expats, and if you owe over $50,000 in taxes (including interest and penalties), you can have your passport revoked.

Tax for Expats and the IRS

In 2014, the IRS introduced a modified amnesty program called the Streamlined Procedure. This allows expats who are behind on their United States tax filing to catch up on back taxes without penalty; and it allows them to retro-claim exemptions to prevent them paying double taxes, such as the Foreign Tax Credit and Foreign Earned Income Exclusion. In the end, many US citizens often don’t end up owing any taxes to the IRS, but they still must file.

Tax for Expats – Expat Tax Preparation: When and Where to File

Tax season is nearing with the deadline approaching soon. As an American expat, you’re probably overwhelmed because filing your taxes is complicated. But you don’t need to be. Whether you’re used to doing your own taxes, or whether you prefer to get help from an expat tax professional, there are some tips to help you decide which way to file your taxes.

Tax for Expats: Getting Started – Expat Tax Preparation Tips When and Where to File

Before filing your tax for expats, you should understand the basics. For example, you must report your world-wide income if your income falls under the following guidelines:

  • You’re self-employed and your income is above $400/yr.
  • You’re single and your income is over $10,300/yr.
  • You’re married and filing taxes jointly and your income is over $20,600/yr.
  • You’re the head of your household and your income is over $13,250/yr.

Tax for Expats – Income Threshold: If your income is above one of these thresholds, you must file a US expat tax return. However, you might not owe any money to the IRS.

Tax for Expats: Gather the correct documents and forms early. These include your previous tax year filing, travel calendar, income documents, deduction documents, and Foreign bank account information. If you’re a meticulous record keeper, filing your expat taxes should be a breeze.

If you’re in doubt about filing tax for expats, you should seek help from a professional tax expert. This also applies if you have more than one income.

Tax for Expats – When to File

If you’re a United States citizen, the rules for filing your income, gift tax returns, estate, and paying estimated taxes are the same, whether you’re living abroad or in the U.S. Thus, your worldwide income is subject to American income tax, regardless of where you live, and you must file your taxes by April 15.

Military Tax for Expats: It’s important to note that, if you’re in the military on duty outside the United States, on the regular date of your return, you’re given an automatic two-month filing extension without having to request one. For example, on a calendar year return, the automatic extension is to June 15. But you must pay any owing taxes by April 15 or interest will be charged.

Tax for Expats – Where to File

If you’re an American living in a foreign country, mail your U.S. tax return to:

Department of the Treasury

Internal Revenue Service Center

Austin, TX 73301-0215, USA.

Tax for Expats – Electronic Filing (e-File)

If you’re a taxpayer with an Adjusted Gross Income (AGI) within a specified threshold, you can file your expat tax return electronically using Free File, which is free. If your AGI is greater than the threshold, you can use the Free File Fillable Forms or e-file by buying commercial software.

Tax for expats can be intimidating, especially if it’s your first-time filing. If you’re ever in doubt about when and where to file, or how to complete the forms, seek help from a tax professional.

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