Information regarding Filing Taxes Overseas for Expatriates, Non-Profit Volunteers, and International Businesspeople.
While we are not tax experts, we have put together a quick and easy reference on filing taxes overseas for expatriates and clients of Good Neighbor Insurance.
1.) The IRS has a great resource with answers to many questions regarding filing taxes overseas as an expatriate. You can start at https://www.irs.gov/individuals/international-taxpayers/taxpayers-living-abroad. (See also the extensive helps for filing taxes overseas at the bottom of that page.)
2.) Next, The IRS also has a page for U.S. Citizens and Resident Aliens Abroad.
Note that the Internal Revenue Service states that if you are a U.S. citizen or resident alien, the rules for filing income tax returns and paying estimated tax are generally the same whether you are living in the United States or abroad. Your worldwide income is subject to U.S. income tax, regardless of where you reside.
3.) The IRS Also has an information hub for international taxpayers we recommend. It can be found at https://www.irs.gov/individuals/international-taxpayers.
4.) There is an IRS publication for those filing taxes overseas you will want to download:
5.) If you spend more than 35 days in the USA in any consecutive (not calendar year) 12 months, you may be subject to IRS fines, based on “The Individual Shared Responsibility Payment.”
We have a white paper explaining this here >> https://www.gninsurance.com/documents/ACA-Individual-Mandate-and-Expatriates.pdf
6.) Healthcare.gov has a tool to determine your exemptions to ACA-related fines here: https://www.healthcare.gov/exemptions-tool/#/
7.) The Wall Street Journal also published a helpful article a while back on What You Should Know when Filing Taxes Overseas, aimed at expatriates and U.S. residents living abroad or working abroad.
8.) Lastly, these short YouTube videos from the IRS offer help filing taxes overseas:
- Filing International Taxes
- The Foreign Earned Income Exclusion
- What is an Individual Taxpayer Identification Number (ITIN)?
- Filing if Married to a Non-U.S. Resident
- Do you Qualify for a Foreign Tax Credit?
- More about the International Individual Taxpayers Assistance page
- Beware Tax Scams
What if you need professional help preparing or filing your tax overseas?
Here are a couple resources you may want to consider that offer specific help to expats and those living overseas:
The U.S. State Department has a guide to filing electronically here: http://photos.state.gov/libraries/france/5/irs/efiling.pdf
http://www.acareturnpreparerdirectory.com/ is a directory of international tax preparers with 1668 listings, however we noticed some of their links are not working properly.
Specific expat tax recommendations from our clients and friends:
- Jeff Wood has prepared hundreds of tax returns for international workers. You can also email him at: Jeff@Woodcabin.com.
- Charles L Jonas, CPA was a tax auditor, then a missionary for years, and now he is back in the states helping other charitable workers with their taxes. email@example.com
- Bret Willoughby, CPA, was recommended by the past President of the Association of Christians Ministering among Internationals. firstname.lastname@example.org
- Randy Bradbury, EA, CLU, Chartered Financial Consultant helps non-missionary expats and expat missionaries with tax consulting and preparation. Website: https://www.MissionaryTaxServices.com (USA): +1-317-215-7110 / 317-703-4729 / Fax: 1-815-301-3349
- Village Tax Service helps international workers, and offer a host of resources. Email them at email@example.com.
- Do you have a recommendation? Let us know so we can include them.
Note: We do not take responsibility for recommending any particular tax service or offering tax advice.
For those preparing to move overseas
- More about tax-deductible moving expenses: https://www.irs.gov/individuals/international-taxpayers/moving-expenses-to-and-from-the-united-states
- Unless you completely renounce your citizenship, non-U.S. residents abroad still have to file federal income taxes: http://finance.yahoo.com/news/non-us-residents-abroad-must-file-income-taxes-195444214.html
While you are exempt from taxes if you make under $101,300 in 2016 (based on Revised Proc. 2015-53.32), you still must file your taxes. More on the Foreign Earned Income and Housing exclusion in Chapter 4 of the IRS Publication 54.
- Some tax advice from Nolo.com: https://www.nolo.com/legal-encyclopedia/when-us-citizens-living-abroad-owe-us-tax.html
- Realize that your domestic insurance carrier can drop your domestic health insurance policy after 2 months overseas due to non-residency. More at: https://www.gninsurance.com/resources/aca-impact-international-insurance/.
You may be able to apply for domestic ACA-compatible health insurance upon your return based on Special Enrollment Period. Otherwise you will need a short-term health plan until the General Enrollment Period is offered again (typically November thru the end of January).
- Also realize that your life insurance probably will not protect you overseas and you will need either International Term-Life (that may, or may not carry over after returning to the USA) or International AD&D.