Discover all the tax services we offer
Get an instance service estimate
Comprehensive guides on everything you need to know from planning your expat journey to filing your expat taxes with ease.
Our Country Guides will help you understand the ins and out of your specific U.S. expat tax requirements.
Access up-to-date articles, breaking news, deadline information and in-depth case studies on US expat taxes.
Get the answers to all your questions and browse Greenback’s most frequently asked customer questions.
Sign up for one of our live webinars hosted by our expert accountant team or watch one on-demand today.
Subscribe to our monthly newsletter to get money-saving tips, expat tax news, and exclusive promos.
Learn how our straightforward pricing, easy process, and an expert team makes us uniquely qualified to simplify the hassle of expat tax filing.
We’ve assembled a team only the most experienced, knowledgeable, and friendly CPAs and IRS Enrolled Agents our clients can trust.
Read our client testimonials to get a feel for the Greenback experience straight from the expats we’ve worked with.
We’re featured in many reliable news sources thanks to our reputation as experts on US taxes abroad.
Whatever your expat tax needs, wheverver in the world, we’d love to hear from you.
If you operate a business outside the US, and you have no other partners or owners, you are considered a sole proprietor. If you have not designated your business in another way in the country you are working in, you will automatically be considered a sole proprietor and your business income and expenses will be reported on a Schedule C on your American expat taxes. Your business would be considered a “disregarded entity” by the IRS. This means the IRS does not consider your business a separate taxable entity from your other income and expenses. Your business taxes are paid on your personal tax return.
Some countries offer business structures that give you tax benefits as a sole proprietor. If you choose to use a structured business style (such as a foreign LLC), but you want to keep your business classified as a sole proprietorship in the US, you will need to file Form 8832 with your first US tax return after the change.
If you choose a foreign LLC type business structure, it is important that you don’t add any other members or owners (even your spouse or children) or you will not be able to claim the disregarded entity status with the IRS. You would be classified as a foreign partnership or foreign corporation (depending upon the exact type of entity you have), and would need to file a separate tax return for your business.
The US tax system is a “pay as you earn” system. This means that you need to pay your taxes as you earn money throughout the year. Most people with a salary or other type of regular payments throughout the year pay their taxes through withholding. Another way to pay your American expat taxes through the year is with estimated tax payments. Estimated taxes are a prepayment of your US taxes, usually made in 4 payments throughout the tax year. If you expect to owe taxes when you file your tax return, and you don’t have enough tax being withheld from your income during the year, then you may need to make estimated payments in order to avoid penalties from the IRS.
If you own a business outside the US, and expect to owe taxes (either income tax or self-employment taxes) to the IRS when you file, you will need to make estimated tax payments to the IRS.
There are some provisions in the tax code for foreign businesses, including the Foreign Tax Credit, that prevent you from having to pay American expat taxes in the US, but you should check with your tax professional to make sure you don’t need to make any estimated payments before foregoing them.
If you are considered a disregarded entity by the IRS, and file a Schedule C form on your personal tax return, you will be subject to self-employment taxes on your business income. Self-employment taxes are the combined employee and employer portions of the Social Security and Medicare taxes for your business. As a sole proprietor, you are considered to be both the employee and owner, and therefore must pay both sides of the Social Security and Medicare tax.
If you live in a country with a Totalization Agreement (also known as a Social Security Agreement) with the US, you may qualify to only pay social taxes to one country. Here is a list of the countries with a Totalization Agreement with the US:
The Totalization Agreements detail out which country you will pay Social Security type taxes to (either the US or your resident country). If you only need to pay the tax to your resident country, you will be able to exclude the self-employment taxes on your US personal tax return.
Depending upon what type of business structure you have, you will most likely need to file informational returns for your business if you have foreign (non-US person) partners or co-owners.
If your business is incorporated, you will need to file form 5471 with your American expat taxes each year. This form details out your corporation’s income and expenses, shareholder information and certain transactions between the corporation and the shareholders. There are high penalties for not filing this form in a timely manner! Be sure you have this form attached to your return if needed. Certain types of foreign business structures are automatically considered to be corporations by the IRS. Here is a list of those structures (listed on pages 1-2).
If your business is not incorporated, but there are multiple members (or owners), you will file a Form 8865 with your tax return. This form details out the income and expenses from your business as well as partner information and transactions. You would be considered a partnership if you own a foreign LLC (Limited Liability Company) with more than one member, even if the other member is your wife or child.
The Foreign Account Tax Compliance Act (FATCA) was designed to prevent the “hiding” of income from the IRS by depositing monies into foreign bank accounts. The wide-flung net of FATCA affects US taxpayers on a personal and business level. FATCA regulations require that US persons file an FBAR form (FinCen Form 114) with the US Treasury every year that their foreign bank accounts total balances reach $10,000 or more at any point during the year. This applies not only to personal bank accounts, but also to business accounts with any US owner. In addition to accounts owned by US persons, any US person who has a signature authority over a bank account needs to report the account to the US Treasury. A signature authority is when a person has the right to sign checks or withdraw funds from a bank account, but is not a direct owner of the account.
We’re here to help! Our CPAs and IRS Enrolled Agents can point you in the right direction, so contact us today. If you’re ready to get started on your taxes, now is the perfect time!
Use our simple excel calculator to get an estimate of how the foreign earned income exclusion will save you money. It will make your day!