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US Expat Tax Help – Planning, Preparation & Representation

As an American, if you have made the decision to pack your case and jet or sail off for a new life in another country in another part of the world as an expatriate, the last thing you want to be worrying about is the IRS and getting your taxes in order.

Just because you no longer currently reside in the US of A however, please do not think for one single solitary second that you are suddenly exempt from paying taxes and adhering to the rules and regulations set out by the IRS.

Currently, the number of people seeking US expat tax help from tax professionals to help ensure that they get adequate tax, preparation, planning and representation to get their taxes and accounts in order is higher than ever before.

Whether you’re living abroad or are working abroad indefinitely, the IRS does not care, all they care about is that you file and submit your taxes and pay what you should like everybody else.

If you are seeking US expat tax help and want to get your taxes in order, here are several things to know as an American living abroad.

Expats Get An Automatic Tax Filing Extension

One particularly interesting thing about US expats is the fact that US expats living or working abroad will receive an automatic tax filing extension which runs until June 15th.

Ordinarily, the tax preparation deadline is the April 15th, yet for expats, the deadline to submit and file your tax return is June 15th. Just be aware that any taxes owed, must be paid to the IRS by April 15th the following year.

Contact us today at 1-562-204-6700.

It Is Unlikely A US Expat Will Owe Taxes

Another important thing to know regarding US expat tax help, is that it is unlikely that US expatriates will actually owe the IRS any taxes.

You see, there are numerous credits, deductions, and exclusions in place to ensure that US expats are not taxed twice on the same income. As an expat, you will likely be able to offset any foreign income earned against things such as:

  • Foreign Housing Exclusion
  • Foreign Tax Credit
  • Foreign Earned Income Exclusion

Again, in order to ensure that you are indeed eligible for these benefits, you must ensure that you have filed your tax return before the deadline.

Know When To File Tax Returns

One of the main reasons why so many US citizens living abroad are seeking out US expat tax help is to understand when they need to file a tax return, prepare it correctly, plan or reduce their tax liability and get proper representation when audited.

According to the tax professionals, US expats must file a tax return if:

  • They receive credits
  • Have an income
  • Special circumstances are applied

Incidentally, incomes can be from:

  • Salary/wages from US and non-US sources
  • Dividends
  • Rental incomes
  • Investments
You Must Qualify To Utilize The FEIE

The FEIE (Foreign Earned Income Exclusion, is not automatic, which means as an expat, you must qualify for this exclusion. To make matters even more complex, you must first elect this exclusion by filing Form 2555-EZ or Form 2555.

The FEIE is, by far, the most effective way for expats to legally reduce/eliminate paying US taxes.

For the previous tax year, expats could exclude up to $107,600 of foreign earned income. For 2021, this year that number is a $108,700. That means that up to that amount, you will not pay US taxes on.

In order to qualify, you must first pass a residency test and will need to physically remain in your country of residency for at least 330 days out of 365.

Contact us today at 1-562-204-6700.

You Can File For An Extension If You Require More Time To Qualify

Another useful piece of information to know with regards to US expat tax help, is the fact that you can legally file for an extension if you do require more time to qualify for the FEIE.

If you do require more time, you can apply for an extension which will run until October 15th, or alternatively, if you do require even more time still, you can file Form 2350.

As an expat, if you have recently moved abroad and are still finding your feet financially, the last thing you want to be doing is paying two lots of taxes and paying the IRS when you don’t need to. Requesting an extension or filing Form 2350 will help buy you some time and ease the pressure somewhat.

If you Renounce Your US Citizenship You May Still Be Liable for Paying US Taxes

A common misconception when it comes to US expat tax help is that by renouncing your US citizenship, you are no longer liable for US tax payments. That is simply not the case.

Often, expats angry at the system and resentful of the notion of paying the IRS taxes despite them not even being in the USA, will think about renouncing their citizenship to avoid paying taxes.

If you are thinking of doing this, you must first prove to be compliant with US taxes for at least 5 years before the date of renunciation.

Depending on your net worth and your income, if you are considering renouncing your citizenship, you may be subject to what is known as an ‘Exit Tax’ Basically, this is the IRS’ own way of ensuring that expats don’t just renounce their citizenship in order to avoid a tax debt and paying the IRS what they should.

Seeking Professional Tax Help Is Always Recommended

Finally, as you can probably tell, if you are a US expat and you are worried you’re paying too much, or are worried you aren’t paying what you should, hiring a tax professional is very strongly recommended indeed for planning, representation and preparation.

As far as US expat tax help goes, our experts are second to none, they know exactly what they’re doing, they know the ins and outs of all things tax-related, and they can make your life so much easier, and probably save you money in the process.

Contact us today at 1-562-204-6700.

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