As is well-known by now, the USA is one of the only countries in the world that puts its citizens through the tax motions every year, even if those citizens do not live, work, own property, earn a living, or bank in the US. Filing Expat Tax in the US is the law ( Expat Tax in the US from outside of the country.), regardless of whether the taxpayer owes any money or not. Although, perhaps this law is not as well-known as it is thought to be. Misunderstandings are frequent, and those with questions may be wondering why they should file and where they can turn when they need help filing the
There are benefits
There are benefits to bringing yourself up to date with the Expat Tax in the US. For instance, if you haven’t filed taxes in the US for many years, then you may not be able to inherit property or be eligible for social security. On the whole, it’s better to be in compliance with the law and the rules. They may not seem fair, but there are actually benefits to everyone following them. And it is important to note that most of the US Expat citizens affected have not been deliberately evading their tax responsibilities; tax laws can be confusing. Many people assume that, if they are paying taxes in their country of residence and not earning US income, there was no need to file. Only later do they find out that they are many years overdue. However, the IRS has tax treaties with most countries, so it is not likely that money is owing. Exemptions will likely be granted, but the proper tax forms need to be filed before the exemption eligibility can be determined.
What are those forms?
If you are a US Citizen or a green card holder, you must file a US tax return and pay any taxes owing, no matter where you live. There are extra forms to be aware of when filing expat tax in the US. You must declare all foreign bank accounts and all money in them, even if one account alone does not contain the limit amount of $10,000. Ask for the FBAR, the Foreign Bank and Financial Accounts Report declaring that money. Some exclusions can be granted. You can fill out the Foreign Earned Income Exclusion to exclude a significant amount, about $100,000, of money earned. The Foreign Tax Credit form is another benefit that prevents people from being taxed twice.
Although the US has tax treaties to help its citizens avoid paying too much when they file expat tax in the US, these treaties are quite complex, and they are different with each country and with the circumstances that each taxpayer falls under. Those who find themselves with questions should consult with a professional tax accountant ( ) who specializes in international and expatriate tax law. They will have the right advice and will advise on the appropriate forms for the circumstances. Contact a tax consultant who can help you. It is better to file and be safe than to be forever worried about what might happen.