You can enjoy the benefits of American citizenship, even when you live outside the country. Unfortunately, you can’t avoid the IRS.
Taxes Are Still Due
Many countries don’t require their expats to pay income taxes if the money they are making happens while they’re outside of the country’s domestic borders. The United States is an exception.
Even if you make money in a foreign country and pay that foreign nation its own taxes, the IRS still expects you to pay American federal taxes on all of your income, regardless of the source.
Some Exceptions Occur
There are some exceptions or reductions possible to this. While you’re subject to the same tax brackets as domestic citizens, NOLO points out that you can take either:
- Exclusions from income
- Foreign tax credit
Both can reduce your overseas tax obligations, although you can only do one or the other.
Filing American Taxes from Outside of the Country
Filing US Taxes from abroad used to be far more complicated than it is now. These days, you pretty much get the same options that domestic citizens get, albeit in a more limited fashion depending on how you do it:
- By Yourself: Some taxpayers still sit down and fill out all the forms by hand before mailing it in. While cumbersome, if you live in a place without electricity or reliable internet connectivity, you might have no choice. Just be sure you use appropriate international postage and mail it as soon as you can.
- Using a Computer: The internet has made life much simpler for ex-pats. Whether it’s just to let a tax program on your computer or laptop connect with IRS servers or use an online-only option, a good connection lets you file digitally with the federal government from anywhere.
- Through a Preparation Professional: Finding a tax preparer who can do American returns overseas is very rare, but some domestic accountants and tax professionals are willing to work over the phone, via email and online with ex-pats looking to have a professional handle their taxes for them.
Typical Deadlines for Expats Filing Taxes
Expats looking to file their taxes still need to do so in a timely manner, just as much as anyone still living domestically. However, given the nature of living abroad, deadlines are sometimes more lenient. There are many good sites that help explain this and other frequently asked questions, but these are the typically pertinent dates:
- April 15th: Normal deadline for federal taxes.
- April 15th: This is also the deadline for paying taxes that are due.
- June 15th: Tax deadline for American expats.
- October 15th: Final tax deadline if you get a six-month extension.
Americans living abroad can automatically qualify, if they need it, for a two-month extension to their filing. This can also be extended another four months electronically or via paper mail by using form 4868.
Just remember that while you can get more time to file your taxes, you don’t get more time to pay it. Penalties and interest will start accruing April 15th and not when you actually file your taxes.
Keep in mind that these dates do shift some years. Deadlines were notably extended in 2020 and 2021 due to pandemic circumstances. Even in some ‘normal’ (i.e. uneventful) years, certain dates might fall a few days back should the normal deadline land on a holiday or weekend.
Don’t Forget Your FBAR
If at any point during the year you have financial assets in financial accounts that total greater than $10,000 is value, then you must file your FBAR. Prior to 2017, you could skip filing this until June, although the deadline for this document has now been moved up to the normal April 15th date to coincide with your return. Fortunately, you can get extensions up to six months to file this document as well with the IRS, should you need more time.
The IRS wants your tax return and your taxes, no matter where in the world you live or earned them.