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In 1991 Billy and Akaisha Kaderli retired at the age of 38. Now, into their 4th decade of this financially independent lifestyle, they invite you to take advantage of their wisdom and experience.

How to File U.S. Expat Taxes

For Americans Abroad

Veronica Rhodes

United States citizens and Green Card holders living overseas still have to file a U.S. tax return every year. Always remember that your worldwide income is subject to U.S. income tax, regardless of where you reside. Filing a tax return is already tricky enough, and filing as an expat can be doubly challenging, especially with the IRS distributing stimulus checks. Here are a few things you should know as an expat when preparing your U.S. tax return.

US Tax forms

What is an expat?

An expat is a United States citizen or a permanent resident (more commonly known as Green Card Holders) living or working abroad. Even if you reside abroad you still need to file a tax return with the IRS yearly. As an expat you should know certain rules to avoid tax issues.

For instance, U.S. citizens and permanent residents living outside of the U.S. should consider Foreign Bank and Financial Accounts Report (FBAR) or Foreign Account Tax Compliance Act (FATCA) requirements when reporting your worldwide income.

Do American expats have to pay taxes?

Yes, American expats still have to pay taxes even if they live abroad. You can take advantage of exclusions, deductions, and credits to ensure you do not pay the same tax for the same income.

4 important things you need to know:

1. If you already paid foreign taxes to a foreign country on your income, you may be eligible to claim the Foreign Tax Credit (FTC) to prevent double taxation.

2. You may reduce or eliminate your U.S taxes with the Foreign Earned Income Exclusion (FEIE). However, you need to meet specific requirements to claim this exclusion. For instance, you need to fulfill the Physical Presence Test. It requires that you physically live in a foreign country for at least 330 days within 12 months.

3. Americans living abroad may be eligible for COVID-19 stimulus payments under the American Rescue Plan Act. Make sure you donít miss your checks.

4. If you have dependent children, you may be eligible for child tax credit and child and dependent care credit. 

Iím an expat and Iíve never filed taxes before

Many U.S. expats think they only need to pay taxes to their country of residence. However, you still have tax obligations to the United States, wherever you are in the world.

If you haven't reported your foreign financial assets and paid U.S. taxes, you may do so using streamlined procedures.

When to file if Iím an expat?

U.S. taxpayers residing outside of the U.S. receive an automatic 2-month extension from April 15th to June 15th. If you're an American expat, you have until June 15th to file your U.S. tax return.

How to file expat taxes?

You can always prepare your tax return yourself. However, U.S. expat taxes can be incredibly complex, and you may miss out on credits and deductions if you're not well-versed in tax laws and procedures. The easiest and safest way to do it is to leave it all to the experts. 

At TFX (Taxes for Expats), we have been preparing U.S. tax returns for Americans living abroad for over 25 years. With our team of specialists, you will never have to worry about mistakes on your tax return. You also get to save more money as our CPAs know all the nuances of the US tax code, especially for those residing in Italy. If you have not yet received your COVID-19 stimulus payments, we can help, too.

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About the Authors

 
Billy and Akaisha Kaderli are recognized retirement experts and internationally published authors on topics of finance, medical tourism and world travel. With the wealth of information they share on their award winning website RetireEarlyLifestyle.com, they have been helping people achieve their own retirement dreams since 1991. They wrote the popular books, The Adventurerís Guide to Early Retirement and Your Retirement Dream IS Possible available on their website bookstore or on Amazon.com.

contact Billy and Akaisha at theguide@retireearlylifestyle.com

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Retire Early Lifestyle appeals to a different kind of person Ė the person who prizes their independence, values their time, and who doesnít want to mindlessly follow the crowd.

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