When Filing US Tax Abroad, the Right Preparations Make All the Difference
Many individuals do not see the need to hire expatriate tax services when it comes time to prepare their US tax abroad. Bringing US tax abroad adds all sorts of IRSimplications, including ensuring double taxation does not take place by deducting taxes paid to a foreign authority, excluding the amounts of income that you are legally eligible to exclude, and deducting certain expenses that are only applicable to expatriates.
Even some of the most competent individuals (and US CPAs alike!) miss these exclusions and deductions when it comes time to prepare their returns for US tax abroad. Failing to do so could lead to costly mistakes and time-consuming corrections that must be filed within the statute of limitations allowed by the IRS.
Padma R., a resident of India, did just that.
After Padma moved to India, she kept her US accountant for a year, then decided the cost did not justify the benefit. After filing her own taxes for a few years, Padma began to receive notices from the IRS claiming incorrect returns for her US taxes abroad and underpayment on US taxes owed. Not knowing what to do, Padma paid the IRS these funds until she looked for expatriate tax services.
In Padma’s own words: “After going back and forth with the IRS, I would give up and just send them the check. After doing some internet research I came across Greenback Tax Services and decided to give them a try. When my taxes were done my tax liability was only 25% of what I had previously been paying. I promptly got my refund from the IRS on the advance tax payment I had made based on the past two years.”
Although Padma had to pay a fee for our expatriate tax services, her refund checks far surpassed the amount she paid to have her previous returns for US taxes abroad prepared and amended by our team of expat CPAs. The expenses of hiring expatriate tax services to prepare your US taxes abroad will likely be far less than the benefits (and avoid the headache!).
Need Help With Your US Tax Abroad?
Have a look at our “US Expat Taxes Explained” series, a great resource for US tax abroad information. If you need assistance with your US tax abroad or would like to learn more about our expat tax services, please contact us.