“If you’re an American expat living abroad, you still need to file your US tax returns.”
**Updated for 2020
Do American Expats Living Abroad Still Have To Pay US Taxes?
When I first moved to France with my husband and three children, I wasn’t sure if we had to file and pay taxes to the US since neither myself or my husband were working for a US company.
It turns out it’s a little more complicated than just a simple yes or no answer.
According to the IRS, American citizens and resident aliens living abroad are still subject to US taxation based on worldwide income, even if you live overseas.
What this means is that you, the person living abroad, will have to file your US taxes every year no matter what.
However, that doesn’t mean you’ll owe taxes to the US. Whether or not you owe anything depends on your situation.
Double taxation
One of the things we were worried about was double taxation. The last thing we wanted was to owe taxes in both the US and in France.
Luckily, there are rules and regulations set in place to prevent double taxation.
To prevent double taxation of expats, the IRS gives you a few options.
- You can exclude your foreign earned income from US taxation.
- You can use the foreign income tax which you paid abroad as a tax credit against the US taxes owed.
- You can exclude other income types from US taxation using a valid tax treaty
You’re probably wondering which one is right for you?
I have no idea.
That’s precisely why we decided to hire a professional to do our expatriate taxes for us.
If you’re struggling to figure out how to do your US taxes as an expat working abroad, a retiree living overseas or a nomad travelling the globe, taxes for expats can help.
Taxes For Expats Review:
What is “TAXES FOR EXPATS”?
Taxes For Expats, aka TFX, is a full-service tax firm that handles personal and business tax returns for Americans who are not living in the US. This includes retirees and expatriates living abroad as well as digital nomads with no fixed address.
TFX is based out of New York and, according to the BBB, was founded in 2007 by Ines Zemelman. They have clients in 175 countries around the world, and the founder has been filing taxes for almost 30 years since 1991.
Taxes for expats can also take care of other tax issues such as:
- back taxes;
- tax planning;
- applying for the IRS amnesty program if you have delinquent taxes;
- reviewing your self-prepared expat tax return;
- helping you file an amended tax return.
$25 dollar discount for my readers
I’ve worked out a deal with Taxes For Expats for all readers of AnnieAndre.com to get a $25 discount off of your first expat tax return using Taxes For Expat services.
Everything is done remotely:
One of the things I love about Taxes For Expats is you don’t need to run to your accountant with binders full of documents or shoeboxes full of receipts.
The entire process—communication with your assigned tax preparer, questions and exchange of documents is handled remotely via email and their client portal dashboard.
If you’ve ever worked with Basecamp or other project management and team communication software, you know how powerful and efficient this is.
If you haven’t worked with any project management software, you’ll love the dashboard because all of your information, documents and communication are centrally organized, so you know which documents to provide each step of the way.
Quicken and Quickbooks
If you happen to use QuickBooks or Quicken like me, things are even more streamlined. You can create reports in the Quicken software and upload them to your portal dashboard for your assigned tax preparer… You’ll still have to input most of your data, but it helps to have a second set of eyes to make sure everything adds up.
Important tax deadlines for Americans:
Before we jump into the review, here are some important dates and deadlines regarding filing and making your tax payment to the IRS.
April 15:
Deadline for Americans citizens and resident aliens living in the US to file and pay taxes
- For those living abroad, you must pay any taxes due by April 15 to avoid any interest and penalties, even if you are filing using the June 15th extension date.
June 15: Automatic 2 month extension date
Most American citizens and resident aliens living outside the US qualify for an automatic two-month extension to file your US tax return.
- If you live abroad, you may put off paying any federal income tax that was due on April 15 until June 15th without penalty however you’ll be charged interest. (Link to US IRS)
October 15
You can request an additional four-month extension from June 15.
- If you qualify for the 2-month extension but are unable to file your return by the June 15th extension date, you may request an additional extension to October 15.
- Use Form 4868, Application for Automatic Extension of Time To File US Individual Income Tax Return.
- File the extension before the June 15 automatic 2-month extension date.
How It Works: Working with Taxes for Expats-Step by step
1) Go to the site and sign up for an account:
Use coupon code 50THANKYOU to get a 50 dollar reduction on their fees.
Once you sign up, you’ll receive an email with instructions and the next steps to create your account, which gives you access to your very own secure tax portal.
2) Schedule a free 30-minute consultation:
You may be asked to put down a 50 dollar retainer fee, which they will apply toward your final bill.
3) Tax questionnaire:
Login to the client portal area and fill out the interactive tax questionnaire.
Unlike other companies, you don’t have to fill out outdated PDF or Word documents. TFX has a built-in ‘smart’ tax questionnaire (TQ) that works inside your browser.
If you have any questions or aren’t sure how to answer something, there’s a faq section to help you. Alternatively, you can email your assigned tax preparer directly if you can’t find the answers you’re searching for.
The tax preparer assigned to us was very knowledgeable and responded within a few hours. She even helped us adjust our previous years’ tax returns to correct mistakes made by an international accountant we used before TFX.
All the information you input into the questionnaire and all the documents you upload are saved so you can access them for future tax years. Huge time saver.
4) Upload Supporting Tax Documents:
At the end of the questionnaire, you’ll see a document checklist where you can begin uploading documents.
Your assigned tax preparer will see them in the portal and use them to complete your expatriate tax return.
5) Review and sign Engagement letter:
Once you complete the questionnaire and upload all the necessary documents, wait for your assigned tax preparer to analyze your situation.
Once she or he finishes analyzing your tax situation, she’ll draft an electronic engagement letter for you to review from within the portal.
The letter will show you the job scope and total cost to prepare your taxes. If all looks good, sign the engagement letter.
6) Wait up to 2 weeks for your tax return to be completed:
If you’re in a rush, TFX offers a rush service for a fee.
7) Pay for the service:
Once you’re notified that you’re tax return is complete, log in to your portal, and you’ll see a link to your completed tax return, but you won’t be able to download and review your tax return or see it in its entirety until you make a payment.
(They accept all credit cards, PayPal, and wire transfers).
8) File your tax returns:
After you’ve reviewed your completed tax return, you can choose to download it and mail it to the IRS yourself, or you can have Taxes for Expats e-file for you. We chose the latter.
How to pay the IRS if you owe money
If you choose e-file and you owe money to the IRS, make sure you send a check directly to the IRS (NOT TAXES FOR EXPATS). Complete instructions on how to pay your taxes are available in your client portal.
That’s it—the whole process.
How much does Taxes For Expats charge for their tax services?
Taxes For Expats has a transparent flat fee structure to prepare your US expat taxes.
They offer three flat-fee packages, 1) premier $450, 2) core $350 and 3) streamlined procedure $1 200.
Most of you will fall under the premier and core plans, which includes all the forms you will need.
If you have a more complicated tax return, have a business or more than one rental property, for example, you’ll probably need some additional tax forms not included in one of the three flat-fee packages. If that’s the case, you’re charged per additional form, similar to an a la carte menu.
Here are some examples of additional forms you might need to purchase not included in one of the flat fee packages.
- FBAR form: An additional $75.
- State tax return: An additional $100 per state return.
- Schedule C: An additional $100
1) CORE package $350
If you earn under 100k per year
This package includes 30+ Tax Forms included including:
PREMIER package: $450
If you gross over 100k per year.
Streamlined Procedure Package
For anyone who hasn’t filed their US taxes for a while and wants to become compliant with amnesty from penalties.
Should you trust Taxes For Expats?
I was a little hesitant to use TFX in the beginning because of a bad experience I had with an international tax accountant based out of Florida. In my defence, there was no way for me to have known because I only had the feedback of one person. The person who recommended him to me.
Online reviews of Taxes for expat.
With Taxes for Expats, you don’t have to rely on the recommendation of one person.
There are thousands of reviews on trust pilot and shopper approved (two well-respected consumer review sites).
There were some negative reviews which is to be expected, but the ratio of positive reviews outweigh the negative reviews by a longshot.
The BBB (Better Business Bureau) gave TFX an “A” rating.
Quality Control
Something I really liked about Taxes for expats is the fact that every tax return is checked by a second and third set of eyes (a quality control check by a CPA or EA (enrolled agent) along with a senior supervisor who double-checks their work.
You don’t always get that when you hire a self-employed expat or international tax accountant.
Enrolled agent (or EA) is a tax advisor who is a federally-authorized tax practitioner empowered by the US Department of the Treasury. Enrolled agents represent taxpayers before the Internal Revenue Service (IRS) for tax issues, including audits, collections and appeals. (source)
Will I use Taxes For Expats again?
I’ve been using “Taxes For Expats” since 2017, and yes, I’ll continue using them.
US Taxes are complicated enough as it is, but even more so if you’re an American resident living or working abroad.
Working with qualified professionals like the ones I encountered at TFX will not only save you time but also help you avoid costly mistakes. If nothing else, you won’t have to anguish or wonder if your taxes are prepared correctly.
Discount code
Readers at AnnieAndre.com get a special $25 discount from TaxesforExpats if you’re a new client.
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