Taxes for Expats: How to Survive, Thrive & Not Get Hunted by the IRS (2024)

I am very lucky (in a lot of ways) but here is a big one: When I was an expat in England, I didn’t have to do UK taxes because I was a student on a Tier 4 Visa.However,I did have to do my US taxes. Even though I wasn’t living in the US! Many people from the US don’t know that when you live abroad, you actually still have to file US taxes on your worldwide income. That’s a pretty important wakeup call because you do not want the IRS hunting you down, my friends! Think how complicated doing taxes for expats is: You have income in multiple countries, bank accounts in multiple countries, multiple jobs (hello blogger life), and more. Taxes for expats is no mean feat.

I literally cannot imagine doing this on my own! Up until last year, I was still able to be a dependent in my parents’ taxes because I was a student under 24 years old. My mom is also a former accountant/tax adviser/numbers pro so that helps 😉 This year, however, I am both no longer a student and no longer 24! I’m diving into this whole adulting thing, which includes taxes. When Taxes for Expats reached out to me to write this post, I honestly first felt such relief that a company like this evenexistsbecause if I am ever an expat again, I will need professional help! I also know that so many of my readers are expats/immigrants so I thought I would share a bit about doing your taxes as an expat, and the Taxes for Expats company!

Get $25 off your taxes!

*This post is sponsored by Taxes for Expats. All opinions remain my own.

What to look for in Taxes for Expats as a preparer

I think most people hate taxes, and this is largely because of what a confusing and frustrating process it can be. Going to a tax preparer can help, but when you are an expat you may find most tax preparers aren’t, well,preparedfor you! There are some great things Taxes for Expats has in place to help with that:

  • Real human tax preparers. Each one has at least 10 years experience.
  • Fair and transparent pricing shown here. A quick search shows me that the average price for a tax preparer is $273. Taxes for Expats runs at $350 which is marginally more expensive but tbh seems very reasonable considering the extra skills and complications that completing taxes for expats requires!
  • Great and secure system. They do not use third parties to store your personal information.
  • Top rated tax preparer for expats! There are nearly a thousand verified reviews from expats all over the world.
  • Women-owned. Gotta add this one in because girl power.

How to complete your taxes with Taxes for Expats

The Taxes for Expats system is pretty simple. There are only 5 steps! I made an account and started going through the process and I have to say their interface is really user friendly. I’ll share a few screenshots below!

1. Register

This is just entering your basic info and creating an account. After you register you will have to answer 8 simple questions, and then you’re set!

2. Telephone consult

After registering you can have a free telephone consultation here.

3. Tax questionnaire

In your user panel, click on the “tax questionnaire” tab on the left (in black below). Then click the orange “create new questionnaire” button.

After you’ve made a new tax questionnaire, just fill it out!This form is actually online and built into your browser – no faffing about with PDFs and word documents required (is it just me or is that always the *worst* and most time consuming?!?). Below you can see some of the basic questions you get.

4. Track your progress and upload documents

In your user panel you also have access to a “documents” section where you upload and download all your relevant tax documents. You can see it below.

5. That’s it… you’re done!

All in all I am really impressed by the interface of this. It is a lot simpler than you expect when you think “taxes”!

Get $25 off your taxes!

Final Thoughts: Should you use Taxes for Expats?

Okay, having an explore is quite different from actually shelling out $350 for a service so… is Taxes for Expats worth it?

First of all, taxes aren’t optional. They are a necessary responsibility that everyone has – so it’s not deciding whether to splurge for a special treat, but rather whether to just do something you needto do, in an easier way. Preparing taxes for expats is very complicated and Taxes for Expats is transforming a usually obscure, complex, frustrating thing (taxes) into something achievable!

I know first hand that living as an expat has its fill of bureaucracy woes. From visa applications, visa renewals, and ever-changing legislature that affects everything from where you can live to how many hours a week you can work… bureaucracy is the price we pay for the privilege of living abroad.Personally,I don’t want to add any more than I have to onto this bureaucracy mountain pile. Deferring to a service like Taxes for Expats is 100% worth it in my book, especially considering the fair and transparent pricing.

Like I mentioned, my mom is a tax preparer and my boyfriend (y’all know Dan) is currently getting his chartered accountant license. I have my fair share of people to help me with taxes and give advice, but eventually that reaches its limit. In the complicated case of taxes for expats, well, thank goodness for companies like Taxes for Expats!

This post is sponsored by Taxes for Expats but I hope it was useful for all of you expats! When the next tax season rolls around, at least you will know you have options. Have any of you used Taxes for Expats or another tax preparer before… or do you dare to do them yourself?! Also just checking… all you Americans *did* know you have to be filing US taxes while you live abroad, right?!

Get $25 off your taxes!

Sarah xx

Pin it for later…

*This post is sponsored by Taxes for Expats. All opinions remain my own.


Taxes for Expats: How to Survive, Thrive & Not Get Hunted by the IRS (2024)

FAQs

Does the IRS go after expats? ›

The United States taxes its citizens and residents on worldwide income, regardless of where they live. This means that a U.S. citizen or resident must file a U.S. income tax return reporting all income, even if the individual lives and works in a foreign country.

What is the IRS expatriate tax exclusion? ›

However, you may qualify to exclude your foreign earnings from income up to an amount that is adjusted annually for inflation ($107,600 for 2020, $108,700 for 2021, $112,000 for 2022, and $120,000 for 2023). In addition, you can exclude or deduct certain foreign housing amounts.

What is the exemption for expat income tax? ›

The Foreign Earned Income Exclusion, or FEIE, is also known as Form 2555 by the IRS. This expat benefit allows you to avoid double taxation by excluding up to a certain amount of foreign earned income from your US taxes. In 2024, for the 2023 tax year, you can exclude up to $120,000 of foreign earned income.

What happens if an expat doesn't pay US taxes? ›

What Happens If US Citizens Don't File Their Taxes While Living Abroad? US citizens living abroad who fail to file US taxes risk passport denial, penalties, and even criminal charges. The IRS charges penalties for both late filing and late payments.

Are expats more likely to be audited? ›

And while IRS audits are generally rare, the chances do increase for expats. In fact, according to IRS data, Americans living overseas are 10 times as likely to be audited as taxpayers living in the US.

Do US expats get audited? ›

When an expatriate completes their Form 8854, they must identify their assets and losses so that the IRS can determine whether they meet the $2 million mark or not. The IRS does pursue audits against taxpayers who they believe may have understated their assets on Form 8854.

Do US expats get taxed twice? ›

The US is one of the few countries that taxes its citizens on their worldwide income, regardless of where they live or earn their income. This means that American expats are potentially subject to double taxation – once by the country where they earn their income, and again by the United States.

Do expats have to pay federal taxes? ›

Do expats pay taxes? Yes, you file a U.S. tax return if you're a U.S. citizen and make over the general income threshold — regardless if you live abroad or Stateside.

How are expats taxed in the US? ›

An expat is someone who moves from their native country and settles abroad. American expats must file a federal tax return and possibly pay U.S. taxes if they earn above a minimum income threshold are typically eligible for an automatic 2-month extension to file, but not to pay any owed taxes.

What are the tax rules for expats? ›

If you are a U.S. citizen or resident living or traveling outside the United States, you generally are required to file income tax returns, estate tax returns, and gift tax returns and pay estimated tax in the same way as those residing in the United States.

What qualifies you as an expat? ›

What Is an Expatriate? An expatriate, or expat, is an individual living and/or working in a country other than their country of citizenship, often temporarily and for work reasons.

How to avoid double taxation on foreign income? ›

Expats can use the Foreign Earned Income Exclusion (FEIE) to exclude a certain amount of foreign income from US taxation. The maximum exclusion amount changes each year. For the 2023 tax year, the FEIE exclusion limit is $120,000 and will increase to $126,500 for the 2024 tax year.

What is the best expat tax service? ›

Comparison of Expat Tax Firms Online Ratings and Fees
​Fee for a Basic Return*​Trustpilot Review Rating*
Greenback Expat Tax Services​$4954.9
​Taxes for Expats​$4004.8
​Bright Tax​$4894.9
​1040Abroad​$400​4.8
1 more row
Jan 9, 2024

Do US expats get tax refunds? ›

Most US expats will not owe US taxes thanks to certain expat tax benefits such as the FEIE (Foreign Earned Income Exclusion), FTC (Foreign Tax Credit), and international tax treaties. As US taxpayers abroad may deduct or exclude tax debt, qualifying expats may see a payment for refundable tax credits.

Does the IRS have an Amnesty program? ›

The most popular and advantageous of the IRS amnesty programs is the IRS Streamlined Procedures. Under this program, a late filer can come clean with the IRS with potentially no penalties by filing tax returns, with all required information returns, for the prior 3 years, and any delinquent FBARs for the prior 6 years.

Can the IRS track you to another country? ›

Yes, the IRS has mechanisms to track foreign income and financial accounts. Foreign banks and financial institutions are required to report accounts held by U.S. citizens to the IRS under the Foreign Account Tax Compliance Act (FATCA).

Who does the IRS go after most? ›

Also, as you might expect, wealthy taxpayers are audited more often than the less affluent—after all, that's where the money is. But even millionaires are facing less IRS scrutiny. In 2019 through 2022, the IRS audited only 0.4% of taxpayers earning $1 million to $5 million.

How does the IRS handle taxes for citizens who live abroad? ›

More In File

If you are a U.S. citizen or resident living or traveling outside the United States, you generally are required to file income tax returns, estate tax returns, and gift tax returns and pay estimated tax in the same way as those residing in the United States.

Top Articles
Latest Posts
Article information

Author: Gregorio Kreiger

Last Updated:

Views: 5995

Rating: 4.7 / 5 (57 voted)

Reviews: 88% of readers found this page helpful

Author information

Name: Gregorio Kreiger

Birthday: 1994-12-18

Address: 89212 Tracey Ramp, Sunside, MT 08453-0951

Phone: +9014805370218

Job: Customer Designer

Hobby: Mountain biking, Orienteering, Hiking, Sewing, Backpacking, Mushroom hunting, Backpacking

Introduction: My name is Gregorio Kreiger, I am a tender, brainy, enthusiastic, combative, agreeable, gentle, gentle person who loves writing and wants to share my knowledge and understanding with you.