One of the most surprising things I learned when I first started living overseas is that as an American living overseas, you are still required to file your income with the IRA every tax season. The United States is one of only two countries in the world that taxes people based on citizenship, not residency (the other country is Eritrea). So, boo to that.
The good news is that it doesn’t have to be complicated. For one thing, you don’t necessarily have to pay taxes to the US Government just because you are living and earning money overseas – it’s only if you earn over a certain amount per year ($102,100 – think I’m safe!) or if you’re a sole business owner overseas (and who would honestly tell??). But you are still required to report what you earned and file your income tax forms just like you always did when you lived at home.
I have to admit that in 2017, April 15th came and went and I had completely forgotten about doing my income tax filing. I have always been pretty good about it, but that was the year I just forgot (by the way, American expats do get a 3 month extension if you’re filing from overseas). Even if you forget though, it’s never really too late! You can still file.
This year I was very lucky to have found Taxes for Expats, a New York-based tax firm that specializes in filing your taxes for you. You just have to fill out a questionnaire with them, and they do all the work!
I was very surprised and impressed by how speedy and efficient they were. Given the 4-hour time difference between Dublin and New York, I thought the communication via email between us would be a bit slower. However, it wasn’t, and in less than 48 hours all my questions had been answered and my income tax filed. They have flat fee pricing (between 350-450 USD, depending on your earnings) and they can help you with a few other things, like filing your FATCA (report any foreign business accounts to the US Government).
Like many other American expats, I really don’t like doing this. I may disagree with how our Government tries to monitor our life overseas, but if we wish to stay on the right side of the law and ensure that we never get whacked with any penalties, then we must comply. Companies like Taxes for Expats make it so much easier, by really doing all the work for you and keeping abrest of all the laws concerning filing paperwork. There are advantages to doing this – for example, if, like me, you are married to a non-US citizen, and you are considering the possibility of getting a green card for your spouse, you must show 3 years worth of income tax files. Or, if you wish to ever buy property in the US using money from your US bank account, but you must deposit the money from your earnings overseas, you must be able to demosntrate how and where you earned your money.
The bottom line is this: File, file, file! Not filing your taxes can have real consequences in the future. If you ever want to consider the possiblities of returning to live in the US one day, or buy property, or have your kids (if you have any) attend college in the US, or any number of possibilities, don’t do anything that can hurt those chances. By choosing a professional company like Taxes for Expats, you can at least be confident that you have stayed on the right side of the law and have done everything you need to do to secure your future with your home country.