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Expat Taxes: 14 Questions You Need to Ask Your Tax Advisor

We receive questions nearly every day from American expatriates.  Most of their emails express confusion and distress surrounding an expat’s reporting and filing requirements.  Don’t be fooled, the IRS Tax Code regarding Americans living and working abroad are some of the most confusing regulations, whose application may be different for each expat.  Be sure you work with a tax professional experienced in helping American expats maximize their tax benefits and minimize their tax liabilities.

Make sure you ask these important questions:

Practice

1. Where are they located?  Even if you never have to meet them face-to-face, the professionalism required of a firm conducting a bona fide business is important.

2. What professional licensure(s) do they hold?  Make sure that the professional you would like to use has an active license in good standing.

3. What is the size of the practice?  Too small, and they will not be able to provide you the support you need.  Too large, and you are just a number, dealing with a junior partner being trained for larger arenas.  Know who is going to be there to help you if the IRS comes knocking at your door.

American Expat Tax Confessions: 7 Reasons I Did Not File A U.S. Tax Return

The single, most common mistake that U.S. citizens abroad make is to not file a U.S. tax return while they are out of the country.  Here are the reasons we’ve heard over the years. 

Please note:  the IRS does NOT accept ANY of these reasons for a failure to file.

“A presenter at a local expat community group told us we do not need to file.”

“I thought that since the Foreign Earned Income Exclusion (for 2009) was $91,400 and we made under $91,400, we did not need to file – that’s what ‘exclusion’ means, right?”

“I read online that if we do not work in U.S. we do not need to file.” 

“My stateside tax preparer said he didn’t think I needed to file while abroad because I didn’t think I’d be working while I was there.”

“A friend told me that I do not need to file because the U.S. only taxes U.S. income.”

“A co-worker told me when we arrived that since we work for a foreign company, we do not need to file.”

“I checked and learned that I worked in a non-tax jurisdiction.  Doesn’t that mean that I did not need to file?”

We share this list with you to reiterate:  If you’re a U.S. citizen or foreign national, you must file a U.S. tax return.