Expatriate Taxes: Backing Up Your Important Documents

The first tax deadline for 2017 expatriate taxes will be here before you know it on April 17, and if you’re like most expats, you’re hoping to get everything wrapped up promptly. Regardless of where you are in the process, one important task to remember is to back up your important tax documents and records.

Why Backup is Important

As you’re likely aware, you need to keep track of your important tax records in order to file your taxes each year. If you don’t hold on to these documents and keep them in a safe place, you might find it challenging to find the information you need when tax time rolls around, whether you’re filing on your own or having a tax professional help you. In the event there is a natural disaster, emergency, or simply a misplacement of the items if you’ve moved into a new home – having your important files saved in more than one place is a good idea.

Backing Up Your Documents

Not long ago, backing up your documents might have meant making paper copies and storing them in a safe or file cabinet. Thankfully, we now have much simpler means of storing important information using digital technology, such as our computers, flash drives, or external hard drives.

You will want to scan your bank statements, tax returns, insurance policies, birth certificates, citizenship documents, and other important documents and save the copies electronically. Most financial companies also offer online account information, which you are able to download as you see fit. If you work with Greenback on your US taxes, you know that we offer the Greenback Tax Companion, which keeps all of your information tidily stored in one place for 6 years.

Creating at least two backups is a good idea – one stored electronically and one as a paper copy – which you can keep in a safe place in your home.

Hold on to Multiple Years’ Documents

The IRS has specific guidelines in place for how long you should keep which documents. Here are a few tips provided for taxpayers:

  • With the increase to the audit period from three to six years, holding on to tax records for the full six years is a good idea, just in case.
  • Records related to a home purchase or sale, stock transactions, IRA, and business rental property should be kept longer.
  • The IRS doesn’t necessarily require you to keep records in any special manner, but we recommend that you keep any and all documents that might impact your expatriate taxes.
  • Records you should keep include: bills, credit card and other receipts, invoices, mileage logs, cancelled, imaged, or substitute checks, proofs of payment, and any other records to support deductions or credits you claim on your return (including foreign country tax returns).

You can also find more information about important tax documents by downloading a US expat tax guide for your specific tax situation.

Don’t Forget to Protect Valuables

While not directly related to expatriate taxes, being prepared all around is a good idea because you never know when disaster could strike. Take photos or videos of the belongings in your home, especially those of high value. Visual records can help you in the event you need to prove the market value of your items for insurance and casualty loss claims. The IRS offers a disaster loss workbook, called Publication 584, which can help you compile a room-by-room list of your belongings.

While we never want to think of worst-case scenarios, it doesn’t hurt to be prepared, and it can save you from a quite a headache! Fortunately, if you do lose track of past federal taxes, you can request back copies of previously filed returns and attachments by filing Form 4506.

Have More Questions About Which Tax Documents Need to be Saved?

Greenback can help. Our team of expat-expert CPAs and IRS Enrolled agents can provide the expat tax advice you need. Schedule a consultation today!

Originally published in 2016; updated February 21, 2018.

Free Guide: 25 Things Every Expat Needs to Know About Taxes

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