If you’re thinking of moving abroad or have already done so, you should know that regardless of your destination, the IRS is –and will forever be – your unwanted traveling companion. And they’re not paying for a share of anything; they’re along strictly for the taking.
The best thing you can do to minimize their annoyance is to make sure you’re doing everything you’re required to still do as a US citizen. The best way to do that is to find a tax advisor you trust and are you’re comfortable with so that they can keep your bases covered while you’re busy taking in all that your new homeland has to offer.
Does it surprise you that the US is the only industrialized country in the world that taxes its overseas citizens, even if they are paying taxes in another country? That’s how Uncle Sam rolls.
The bottom line is that, as a US citizen, you have to comply with US tax filing requirements. No matter how you slice it, you’re on the hook with Uncle Sam.
That’s not to say that there aren’t a few quivers in your bow.
- If you pay your income taxes abroad, a Foreign Tax Credit may be in your future. While it’s true that you can end up not owing any US income tax at all, there’s a hefty pile of penalties and interest you can accrue if you fail to file.
- Even if you’re not earning income in your new homeland, you should file a return with the US. You’re not required to but it’s the smart move because it acts as a blocking measure. There is a statute of limitations on tax disputes, and if there is a dispute over back taxes, your filing starts running out the clock on the statute of limitations.
- If you file before the IRS gets on your case, you’re getting in front of the problem. If you owe nothing, there will be no penalties or interest. If you do owe taxes, you’ll end up paying less because you’ve filed voluntarily.
We’ve Got Your Back
The US tax code changes every year. Expatriate tax return is significantly more complicated than a normal US tax return, and the IRS recently hired almost 1,000 additional agents to make sure expats are filing correctly. These guys play for keeps.
The decision to move abroad is a life-changing one, and it’s important to have someone who knows all the ins and outs on your side.
Get in touch with us today, and let us start working for you so that you not only can take advantage of all the benefits you’re entitled to but have the protection your entitled to.
Send an email to Eric Stuhler at firstname.lastname@example.org.