Do you live abroad and have to file taxes in the United States? If so, you are probably wondering what steps you need to take to make the process as smooth as possible. Filing taxes can be tricky enough when you are living in the same country as your tax forms, let alone when you are living in a different country! In this post, we will provide 5 tips for tax filers living abroad that will help make the process easier.
Top Tips For Tax Filers Living Abroad
If you’re one of the nearly 9 million Americans living abroad, you might be wondering how to handle your taxes. The good news is that the IRS offers several special provisions for taxpayers who are out of the country. Here are five tips to help you get started:
#1 Check The Deadline
- The IRS has issued a reminder to taxpayers who live outside the United States that they may need to file their taxes by a different deadline than those who live in the country.
- Taxpayers who are living and working abroad as of December 31st will need to file their taxes by June 15th. This is because they are granted an extension due to the difficulty of filing from another country.
- However, taxpayers who are not living and working abroad as of December 31st will need to file their taxes by the standard April 15th deadline. Those who are unsure of whether or not they qualify for the extension can find more information on the IRS website.
#2 Know Your Filing Status
- If you are a U.S. citizen or resident alien living outside the United States, you are required to file a federal income tax return annually. Your filing status is based on your marital status and whether you maintain a home in the United States.
- There are three possible filing statuses for taxpayers who live abroad: single, married filing jointly, and married filing separately. The married filing jointly status is generally the most beneficial, as it allows you to combine your incomes and claim certain deductions and credits.
- However, you may want to consult with a tax professional to determine which status is best for you. Remember that if you owe taxes, you should file and pay your taxes by the April deadline to avoid penalties. If you need more time to file, you can request an extension, but you will still be responsible for any taxes owed.
#3 Get Credit For Foreign Taxes Paid
- Taxpayers who live and work abroad have to pay taxes in both their country of residence as well as their country of citizenship. This can create a significant tax burden, particularly for those who are working in high-tax jurisdictions.
- To alleviate this burden, the IRS allows taxpayers to claim a foreign tax credit for taxes paid to other countries. However, there are strict rules about how this credit can be claimed, and many taxpayers are unaware of the credit or how to claim it.
- As a result, many taxpayers end up paying more in taxes than they should. The IRS should do more to publicize the foreign tax credit and make it easier for taxpayers to claim it. This would provide much-needed relief for taxpayers who are struggling to meet their tax obligations.
#4 Consider Using An Expatriate Tax Service
- Taxpayers who live outside of the United States may have difficulty completing their taxes without the help of an expatriate tax service. These services are designed to help taxpayers who live in foreign countries and may not be familiar with all of the tax rules and regulations.
- An expatriate tax service can help taxpayers file their taxes accurately and on time. In addition, an expatriate tax service can also provide helpful information about claiming deductions and credits, as well as providing assistance with any other tax-related issues.
- By using an expatriate tax service, taxpayers can ensure that they comply with all of the necessary tax laws and regulations.
#5 Keep Good Records
- As a tax filer who lives abroad, it is important to keep good records. This includes records of your income, expenses, and any other financial information that may be relevant to your taxes.
- Good record keeping will help you to prepare your taxes accurately and to avoid any penalties or interest charges. It is also a good idea to keep copies of your tax returns from previous years.
- This will help you to track your progress and to identify any areas where you may need to make changes. By keeping good records, you can ensure that you can file your taxes correctly and avoid any unnecessary complications.
Conclusion
If you need assistance with your U.S. taxes and have foreign income, the IRS has staff members located in U.S. consulates and embassies all over the world who can help. You can find a list of those offices on the IRS website. Before you reach out, be sure to gather all of your relevant information and have questions ready so that you can get the help you need as quickly as possible. Thanks for reading!