When filing US taxes as an expat, it's important to understand the various rules and requirements you have to meet. These can be confusing, especially for beginners, and mistakes can result in fines and penalties. If you have any questions about filing US taxes as an expat, consult a tax professional. A tax professional can help you file your return, including avoiding the most common mistakes.
In general, you will need to report all of your income on your US tax return. Whether you receive your income abroad or from a source within the US, you will need to report it. This includes any rental or investment income you may have. The standard deduction for expats is lower than for stateside taxpayers, but you may be eligible for additional tax breaks. You can also claim an expat-specific benefit, such as a foreign housing exclusion.
You may also be eligible for a tax credit for the foreign tax you paid. However, you can't claim the credit if you've already claimed your exemption. For that reason, you might want to consider applying for an automatic extension on your U.S. federal tax return.
There are several forms you will need to complete, and you'll need to file them on time. If you have bank accounts abroad, you'll need to file a Foreign Bank Account Report. Also, if you have a large amount of money in a foreign bank account, you'll need to file an FBAR form.
In addition to the aforementioned forms, you'll need to file your Form 1040. This form is used to calculate your tax and refund. It is also used to summarize your income and deductions. You should attach any other forms you're required to fill out to your Form 1040.
If you're an American expat living abroad, you'll need to file yearly U.S. tax returns. Some of the more specific forms you'll need to file include Form 2555, a report that describes your employment and your foreign income. The report will show you how much money you earned, when you traveled, and your employer's address.
While you're at it, you'll probably want to claim the Foreign Earned Income Exclusion, or FEIE. Using this form will allow you to exclude up to $108,700 of your earned income in 2022 from your taxable income in the United States. Even better, you'll be able to avoid an audit, which means you won't have to pay any cash outlays.
If you're an American expat, you may be surprised to learn that there are a variety of specialized US tax requirements you'll need to comply with. These include a tax filing deadline and an extension, among other things. Make sure you're aware of these special requirements and the dates you'll need to file to stay on the right side of the IRS.
As far as tax preparation goes, you'll probably want to turn to an international tax advisor, preferably one that specializes in US tax returns. A virtual accountant can do the job for you and ensure that you don't make any mistakes.