Planning for the year ahead is an excellent idea for all taxpayers, but it’s basically a necessity when it comes to expat taxes. Want to make sure you’ve done everything you can to be proactive (at least, expat tax-wise) before 2019? Check these five items off your to-do list, and you’ll know you’re as prepped as possible.
#1: Have a Look at Your Bank Statements for Income and Expenses
The best way to get started is to make sure you have all the information you need at your fingertips. If you don’t receive income statements from your employer, then you’ll need to do it the old-fashioned way: with a calculator.
Next, look over your bank statements. Did your foreign bank accounts, in total, reach $10,000 at any point during the year? If so, you’ll be on the hook for filing a Foreign Bank Account Report (FBAR).
If you qualify for the Foreign Earned Income Exclusion (FEIE), you’ll also want to gather your housing expenses to determine if you are eligible for the foreign housing exclusion as well. Qualifying expenses include:
- Utilities (except TV services, telephone, and internet)
- Personal property insurance (homeowners or renters insurance)
- Leasing fees
- Furniture rental
- Parking rental
Once you have all these documents in hand, you’ll be on your way to being fully ready to ring in the New Year.
#2: Keep Tabs on Your Property and Investments
If you experienced capital losses in the stock market or other investments this year, you can write those losses off once you’ve gotten rid of the investments. You’ll also want to keep tabs on other forms of income you may have acquired throughout 2018, so don’t forget to obtain documentation of those capital gains and investment properties, if you have them. Have property you don’t need? Making a charitable donation before the end of the year can also help offset your tax liabilities.
#3: Get Your Calendar Out
Seasoned expats may have their travel calendar completed as they go, but if you didn’t, now is the time. Record your travel time for the year so that you have proof of your expat status when the time comes to qualify for money-saving deductions like the FEIE.
#4: Determine if Estimated Tax Payments Are in Your Future
Estimated tax payments are required of expats who end up owing more than $1,000 after withholding, if you owed taxes the prior year, or if you have a US-based corporation that will owe more than $500. If any of these were the case for you last year, they could very well be the case for you this year, too. Planning ahead can help you budget for 2019 and also will ensure you don’t end up with those expensive penalties. The next four estimated tax due dates are:
- Q4: Tuesday, January 15, 2019
- Q1: Monday, April 15, 2019
- Q2: Monday, June 17, 2019
- Q3: Monday, September 16, 2019
Failing to pay by these dates can result in an underpayment penalty which is based on the amount of the underpayment and how late the payment is.
#5 Brush Up on the Latest Expat Tax Changes
Many changes occurred over the course of 2018. Some were annual, expected changes like the tax bracket adjustments, and some were sweeping and surprising, like the Tax Cuts and Jobs Act and Tax Reform 2.0, if it ends up passing and becoming legislation. The new tax legislation doesn’t have many expat-specific changes in store but has overall changes for American taxpayers that will affect expats in certain situations, like expats with children, small business owners, those who deduct medical expenses, and investors in IRAs.
Get Started Today
Let Greenback make your expat taxes easier than you ever imagined. We offer a variety of services to make sure your tax preparation is a hassle-free experience. Have questions? Contact us today and we’ll help get you the answers you need so you can be as prepared as possible for the new year ahead.