Helping Americans who live outside the U.S. is our main line of business. Some may have moved recently while others had lived abroad their entire lives - but they all need an expert to help and guide them through the complexities of U.S. taxes.
Simply living abroad is challenging enough - but Americans must also contend with tax laws of both the U.S. and their resident country. This is so because U.S. citizens are required to file an annual U.S. tax return regardless of where in the world they live. There are, however, many tax breaks that reduce (and often completely eliminate) the U.S. tax liability.
U.S. expat tax is complicated to say the least, but this is what we do day in and day out. Your situation is certainly unique, but in all likelihood we have dealt with similar scenarios in the past. We currently serve clients in over 175 countries and are intimately familiar with the issues you face no matter where in the world life may take you.
WHAT YOU NEED TO KNOW:
- No matter where you reside - you must file. All US citizens and Green Card holders must (if they meet minimum filing thresholds) file an annual tax return reporting their worldwide income.
- Filing is required - but you likely won’t owe anything. The good news is that most expats don’t end up paying any taxes to the IRS. There are a plethora of tax deductions which we will utilize that allow taxpayers to deduct more than $100,000 from their taxable income. But - in order to receive these generous exclusions and deductions - you must continue to file. Failure to do so can lead to penalties.
WHAT’S DIFFERENT ABOUT EXPAT RETURNS?
- The aforementioned deductions are not automatic. In order to benefit from the myriad of exclusions available - the Foreign Earned Income Exclusion (FEIE), Foreign Tax Credit, Foreign Housing Exclusion, Treaty exclusions, and many more - your tax return must be prepared correctly and tax saving tools utilized properly.
- Factoring self-employment complications, foreign pension treatment, treatment of employer contributions, taxability of foreign passive investment corporations, totalization agreements, and digging through the dense web of tax treaties, the world of expat taxes is difficult and can make the most astute of regular CPAs throw their hands up in defeat.
- The greatest pediatrician in the world will still make for a pretty poor veterinarian.
HOW WE CAN HELP
- At TFX we have been preparing expat returns for over 25 years and have clients in 175 countries. Complex as they may be, someone needs to understand them, and filing US tax returns for Americans all over the world is all we do, day in and day out - rain or shine.
- Aside from knowledge, convenience is key. Our clients rave about our best in class secure online portal and how TFX helps make the laborious task of filing taxes easier. We’re actually the top-rated expat tax firm ( with an average score of 9.8 on TrustPilot).
- We built an innovative tax preparation system that enables us to provide different tax-related services to our clients no matter where they live.
- Our fees are straightforward and unlike the Big 4 we do not hire junior staff. No outsourcing, no middle men: you’d be working directly with an experienced (our average age is 42) CPA or EA who will handle your case from beginning to end.
Frequently Asked Questions
1. Why am I required to file a tax return if I don’t live in the US?
Such is the U.S. law. American citizens and green-card holders are required to file an annual return on their worldwide income (regardless of where they live and where the income is earned).
For more details about history of how U.S. came to this mode of taxation, please see this article.
2. Will I be double taxed on my earnings?
In a word - no.
What you pay in taxes to your host country will be counted against your U.S. tax liability. So you will not be double-taxed - as simple as that.
3. What is the minimum income level at which I must start filing a US tax return?
4. Do I have to report my non-American spouse income?
No - you do not.
However - it may be advantageous for you to file together with your spouse. We will advise you based on your individual circumstances in the course of our engagement.
5. I heard that my first $100k are tax-free in the US if I don’t spend too much time there. What are the rules?
6. Is it possible to actually receive a refund if I don’t pay any US tax?
7. I haven’t filed for many years - can I start doing it now without incurring fines or penalties?
Yes - absolutely.
A Streamlined Procedure program announced in the June 2014 allows those living abroad to file back-taxes without any fees or penalties. Please see this article.