In an effort to help our customers prepare their US expat taxes while living abroad, Greenback Expat Tax Services provides a list of the most frequently asked questions. You can also access our blog for great expat tax advice, information, and resources.
We are always available if you need to reach us directly, simply contact us.
You can use the category links to browse through the full list of FAQs, or read through our 10 most popular questions below.
Top 10 Expat Tax Questions
1. Who at Greenback will do my taxes?
With Greenback what you see is what you get. All of our accountants are listed out on our Meet the Team page, which you can view by clicking here. We only hire experienced CPAs and IRS Enrolled agents who have experienced working with Americans living overseas. We do not outsource your taxes or any of your financial documents to India or anyplace else. The accountant you are assigned to work with will be the individual who prepares your taxes, answers your questions and signs your tax return. Even the Big 4 don’t offer this kind of service!
2. I have not filed my US tax return in years; where do I start?
This situation is more common than you might think. You should start by talking with an expat tax expert to identify how many years of back taxes you are going to need to file and what documentation you need in order to complete the necessary reports and returns to become compliant with the US tax authorities. Each year there seem to be new items that can trip up expats, including Foreign Bank Account Reporting, FATCA reporting and now the Affordable Care Act. Each of these can carry their own penalties, but an experienced accountant can walk you through the process and help you avoid or minimize the penalties. Be aware that you may owe penalties for filing late or failing to pay taxes on time, but this will depend on what taxes you have paid locally, your filing status and your employment status. Generally speaking, you will only owe interest and penalties on your taxes if you owed money on your US taxes, which will cause interest and penalties to accrue on the underpayment. From our experience, US expats have not had FBAR penalties imposed on them; if they did not know they needed to file the FBAR. So, if you voluntarily come forward and file your taxes and submit the FBAR forms for the years you missed, it is likely the IRS will forgive the penalties.
3. What are your US expat tax preparation fees?
We have tried to make our pricing as clear and inclusive as possible. All of our pricing is laid out on our Services Page, which you can view by clicking here. Briefly, we have tried to make our Federal Tax Return include everything that the average person would need included in their tax return including both the Foreign Earned Income Exclusion and the Foreign Tax Credit, the standard forms and schedules including A, B, C, D, E (for 1 rental property), up to 3 K-1s, the FATCA Form 8938 and up to 20 bank or brokerage transactions. If you have additional filing needs, such as foreign businesses or trusts, FBAR preparation, state tax returns, etc., we are happy to prepare the additional forms for an additional fee. Please visit our Pricing Calculator (click here) if you would like a no obligation price quote.
If you need to file late tax returns to help you get caught up on your taxes we do offer a discount on the late returns. These are billed at $279 per late Federal return, a 20% discount on our normal pricing.
4. How does the IRS Streamlined Filing Program work?
On September 1, 2012, the IRS announced a new initiative specifically for American expats who are behind on their required tax filings. This new program allows taxpayers to get caught up by filing only the last three years of expat tax returns, as well as six years of Foreign Bank Account Reporting (FBAR) forms. All forms are filed together along with a two-page questionnaire to one specific address at the Department of the Treasury. This program is specifically for “low risk” tax payers, which the IRS defines as individuals who owe less than $1,500 in taxes each year and have no indication of significant tax planning (among other requirements).
The IRS hasn’t announced when this program will end, but we recommend individuals take advantage of this special program while it is still open. We can help in all aspects of this filing (including help with the questionnaire). Our experts will ensure you have everything you need to take advantage of this amnesty program. If you qualify there has never been a better time to get back on track!
5. How many years of late us tax returns do I need to file?
Calculating how many years of US expat taxes you need to file depends on your situation. Typically, three to six years will be sufficient for the IRS to consider you “caught up.” If you are trying to sponsor a spouse for US citizenship, up to eight years may be required in order to prove your ability to support your spouse as a US citizen, but this can vary based on the requirements of your local embassy. If you need to get caught up to prove financial merit, such as a loan application, three years is generally enough. Every situation is different, and you should discuss your options with an expat tax expert to make sure you file the correct number of returns, but here is an outline for some common situations:
- IRS Streamlined Program – 3 years of Federal Returns and 6 years of FBARs
- Offshore Voluntary Disclosure – 6-8 years of Federal Returns and 6-8 years of FBARs
- “Quiet Disclosure” – 3-6 years of Federal Returns and 3-6 years of FBARs
If you have specific questions about how you can get caught up on your US taxes, please Contact Us today.
6. How do I qualify as an American expat?
The IRS has multiple tools in place to eliminate dual taxation, but you must qualify as an American expat to take advantage of them.
In order to qualify as an American expat, you must meet the following requirements:
You must have foreign earned income.
Your tax home must be in a foreign country.
You must do one of the following:
- Pass the Bona Fide Residence Test – A US citizen who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year,
- Pass the Physical Presence Test – A US citizen or a US resident alien who is physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months, or
- Be a US resident alien who is a citizen or national of a country with which the United States has an income tax treaty with a non-discrimination article in effect who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year.
7. Can you help me renounce my citizenship?
The decision to renounce your US citizenship is a big one, and if you have decided that it is the right choice for you, we can certainly help!
The renouncing process requires you to be completely caught up on your US tax obligations, and we can make sure you have all of the required forms and schedules ready to go. To determine what other steps are necessary to renounce your US citizenship, we recommend visiting your local US embassy or consulate to get a checklist.
8. How can I be sure my personal information is secure throughout the tax preparation process?
In this age of identity theft, we do our best to ensure your data is kept safe and secure. That is why we ask that you do not use your email account to send financial or other confidential data, as it may not be transmitted securely. We provide each client with a secure data sharing folder located online which is protected by the same 128-bit encryption you’ll find on most banking websites. You will create your own password for this folder so you can upload sensitive information with ease and peace of mind. As an added bonus your accountant can then access the data immediately. Using this method allows only your accountant to view your personal data and provides you with a secure way of reviewing your tax return once it has been prepared. This folder is open year-round so you are also able to upload your tax documents as you receive them, which can help you stay organized!
9. What information do you need from me to prepare the US expat tax return?
As you can imagine, the information required to complete your expat tax return is standard across all accountants and accounting firms. We have tried to differentiate ourselves by making the system we use to capture this data as simple for you to follow as possible. At the heart of this, we have made two assumptions about you:
1. You are not an accountant
2. You have better things to do with your time than calculate the miscellaneous information the IRS requires
The information will include:
- Details of all of your income – such as salaries, capital gains, interest, rents, dividends, etc.
- Details about your expenses – such as local taxes paid, housing expenses, investment expenses, etc.
- Details about your personal situation – such as marital status, dependents, the number of days you spent abroad, etc.
We will ask you to upload PDF copies of your data to us or you can snail mail us copies, but this can slow things down. We will not ask you to do any of the calculations or to rummage through your documents to find information. Instead, we ask you to upload your documents and to let our accountants do the work for you.
10. Why should I choose Greenback to prepare my taxes?
We know there are lots of options out there for individuals to have their taxes prepared. What we strive to do is create a more personalized and reasonably priced option for people living abroad. We know that living abroad has many challenges (our co-founders and a number of our staff all live abroad), but we don’t think that your US taxes should be among the challenges. So, we hire experienced and personable accountants for you to work with, we use tried and tested technologies to streamline the process, we keep our prices reasonable and very competitive, and whenever possible we have you work with the same accountant each year so that you know and trust each other. Overall, we hope that this takes the hassle of dealing with your US taxes off of your shoulders and puts it in our trusted hands.