Taxes For Expats – How To Never Make Expensive Mistakes

Taxes For Expats

At Tax Samaritan, we are a highly specialized team of Enrolled Agents (EA) that provide U.S. taxes for expats securely with the convenience and quality interaction that you expect from a local professional.

If this is your first time abroad, the concept of taxes for expats may have not ever crossed your mind; in that you have a filing obligation based on worldwide income even if your foreign income ultimately results in no taxes due.

You continue to have a tax-filing requirement even though you are now residing overseas. You are required to file taxes on foreign income even if you pay taxes in the host countries.

Researching Taxes For Expats

When researching your U.S. tax and filing obligations, many taxpayers discover a much more complicated return where guidance and support that you have come to expect from the IRS and the majority of tax professionals is often virtually non-existent. The good news though is that there are many opportunities and benefits as an overseas taxpayer to reduce or altogether eliminate your U.S. taxes. The goal is to understand your filing obligations and partner with a tax professional that you would like for a long-term relationship, whether living abroad or in the U.S.

Taxes For Expats Issues Are Unique

Not all expats have the same tax situation and issues and as such all overseas taxpayers must be treated uniquely by their tax professional. Everyone should have a separate and specialized approach to ensure that not only the return has the lowest tax due (everyone wants to pay the least amount of tax possible) but also to ensure that the return is accurate and complete. This is especially important as taxes for expats often gives rise to new and unique reporting requirements, such as the FBAR , Form 5471 and Form 8621 , that are far from the norm for the typical US taxpayer and can be affected by foreign accounts, investments and assets overseas and the establishment of a foreign business.

The Myth Of No Taxes For Expats

There are an estimated more than 6.4 million Americans who keep their U.S. passport but are building a new life in one of more than 160 countries around the world. It is important to understand taxes for expats and the corresponding obligations so as to not run afoul of the taxing (and onerous penalty environment) of the U.S. government.

While it’s difficult to comprehend why you need to file when you don’t have to pay any taxes, the end result is that if you fail to file, you can be on the hook for very punitive penalties in conjunction with the loss of significant tax benefits (such as the foreign earned income exclusion) if your failure to file and correct is identified by the taxing authority first.

Failing to file your federal taxes is one of the most common and expensive mistakes that Americans abroad can make.

In recent years, the IRS has stiffened regulations to smoke out and identify tax evaders, consequently making life even harder for those Americans who have simply ignored their taxes or failed to disclose foreign account/asset holdings because they assumed they were exempt or not even aware of such requirements.

To crack down on tax evasion, the U.S. has put in place the Foreign Accounts and Tax Compliance Act (FATCA) which makes it tougher to hide from the IRS as foreign governments and foreign financial institutions will share information on accounts held by US citizens. In addition, there are many international data exchange agreements in which information not limited to financial accounts is also beginning to be shared. While undoubtedly this will catch a lot of bad guys, a lot of innocent taxpayers could be caught in the net as well.

Our goal at Tax Samaritan is to provide the best counsel, advocacy and personal service for our clients. We are not only tax preparation and representation experts, but strive to become valued business partners. Tax Samaritan is committed to understanding our client’s unique needs; every tax situation is different and requires a personal approach in providing realistic and effective solutions.

If you would like a quote, please click on the button below for a free, no obligation Tax Preparation quote and/or free 30-minute consultation to discuss your situation regarding taxes for expats further:

Tax Samaritan is a team of Enrolled Agents with over 25 years of experience focusing on US taxes for expats. We maintain this tax blog where all articles are written by Enrolled Agents. Our main objective is to educate US taxpayers on their tax responsibilities and the selection of a tax professional. Our articles are also designed to help taxpayers looking to self prepare, providing specific tips and pitfalls to avoid.

When looking for a tax professional, choose carefully. We recommend that you hire a credentialed tax professional such as Tax Samaritan that is an Enrolled Agent (America’s Tax Experts). If you are a US taxpayer overseas, we further recommend that you seek a professional who is experienced in expat tax preparation, like Tax Samaritan (most tax professionals have limited to no experience with the unique tax issues of expat taxpayers).

Randall Brody is an enrolled agent, licensed by the US Department of the Treasury to represent taxpayers before the IRS for audits, collections and appeals. To attain the enrolled agent designation, candidates must demonstrate expertise in taxation, fulfill continuing education credits and adhere to a stringent code of ethics.

Every effort has been taken to provide the most accurate and honest analysis of the tax information provided in this blog. Please use your discretion before making any decisions based on the information provided. This taxes for expats blog is not intended to be a substitute for seeking professional tax advice based on your individual needs.