US Tax Abroad for the Self-Employed
US tax abroad is complicated no matter what the situation. Owning your own business overseas is no exception. Self-employment requires additional tax planning, including pre-payments throughout the tax year in order to avoid a high tax bill when it comes time to file your US tax abroad.
Running a business overseas has multiple advantages. There are lower tax rates in certain areas. Other areas have an untouched client base. Potentially, there is reduced competition. It is important to be aware that you will still be required to file US tax abroad for your small business. This is required even if you do not owe any taxes to your host country. Take note that filing for your small business overseas does not replace your need to file individual federal or state tax returns abroad.
Tax planning is critical to the success of a self-employed individual living overseas. You may have used simple tax software or have a competent accountant in the US who has previously dealt with your personal and business taxes. However, US tax abroad is more complicated. It would be wise to seek advice with an expat CPA regarding your US tax abroad due to the additional forms and schedules that must be completed (and are not included in any personal tax software).
We have had many self-employed clients scattered around the world, including Beth T., who resides in Scotland. Having the same accountant no matter where she was located has proven to be an asset to Beth, as did having an accountant with a keen eye for detail.
“Being able to upload my documents via a secure centralized location (and download different ones from her in the same venue), made the entire process a rapid and efficient one. [I still marvel at how simple, yet priceless, that feature remains.]…A seemingly small detail that had huge implications: I’d somehow overlooked including my son’s last semester’s tuition on the data sheets, probably because I was so absorbed in his current non-student status. My accountant took care to double check and quite literally saved me thousands of dollars…I will certainly be calling on Greenback to do my taxes each and every year. I give them the highest recommendation possible.”
Need Help With Your US Tax Abroad?
To have a look at our “US Expat Taxes Explained” series, a great resource for US tax abroad information click here. It is important to have an experienced, trustworthy and detail-oriented expat CPA to take care of your US tax abroad obligations, so if you would like to learn more about our expat tax services, please contact us.