It’s time to plan for 2019 if you haven’t already. Though the end of the year can be a difficult time to squeeze in any extra tasks, don’t let tax prep be the task you let slide! Your finances will thank you – we promise. Use our collection of hacks to ensure that your tax future looks very bright.
Find Those Documents
Living abroad means that you need more documents than the average American taxpayer to be ready for tax season. Getting those documents ready now, while your travel dates are fresher in your mind and before the eleventh-hour scramble in the spring, means you’ll save yourself stress later. So, track down income records and documentation of any capital gains, interest, or dividends you earned this year. If you’re self-employed, you can start adding up your income and expenses, which can be a tiring assignment.
While you’re at it, check out your bank account information, and start tallying. If your bank accounts (all of them added together) exceeded $10,000 at any point this year, you will be required to file an FBAR (Foreign Bank Account Report).
Next, add up your housing expenses. You may qualify to use the Foreign Housing Exclusion, so make a note of rent (but not mortgage payments!), utilities excluding TV and internet, homeowners or renters insurance premiums, furniture rental, and property taxes. For a complete list, download our free guide to the documents you may need.
Keep These Deadlines in Mind
Though the IRS has not officially announced a start date to the 2019 tax filing season, when it does, we will let you know! That date, which usually falls around the last week of January, is typically revealed by the IRS in December. It signals when the IRS will begin accepting your tax returns and any other applicable filing requirements. American expats will want to meet the April 15, 2019, deadline in order to avoid interest on any tax owed. You’ll also want to find out what the tax deadlines are in your host country so that you avoid penalties and interest on that end, too.
Peruse the New Forms
2018 was nothing if not a year full of changes in the tax universe. Even the size of the 1040 has changed! The IRS has released the new Federal Tax Return forms, and you can find out what will be different in 2019. E-filers won’t be affected by the size change, of course, but they would still benefit from knowing what will be different in 2019. Read our article about what to expect next year, and you’ll steer clear of any unwanted surprises.
Get Ready for Estimated Payments
If you owed taxes last year, chances are you could owe again this year. Or, if you received a big income increase and your finances have changed significantly, you may owe for the first time. Making estimated payments is your best bet for avoiding underpayment penalties. The first quarterly estimated payment deadline is January 15, 2019, and that is right around the corner!
If you believe you will be on the hook to pay estimated taxes, the IRS has four ways in which you can submit these payments:
- Crediting an overpayment on your 2018 tax return to your 2019 estimated tax
- Mailing your payment (in USD) with a payment voucher on Form 1040-ES
- Paying online via Foreign Electronic Payments or pay by phone using the information from the Form 1040-ES instructions (check page 3)
- Paying via electronic funds withdrawal with your e-filed return
Limit Tax Liabilities
If you can, limit your tax liability by making a charitable donation, utilizing Roth IRA recharacterizations, and disposing of losing shares.
Greenback Is the Ultimate Tax Hack for Expats
It’s no secret that expat taxes are complicated, and the rules have all been changed recently. Leaving your taxes to the experts at Greenback means that you don’t need to stay current on all the newest regulations; you can focus on ringing in the New Year instead. Get started with Greenback today!