All citizens need to pay taxes to their government. Interestingly, some individuals think that by moving to a different country, they can avoid paying taxes. They couldn’t be more mistaken.
As a U.S. citizen, practically no matter where you are in the world, you’re obligated to pay federal taxes. As long as you hold an American passport, you need to file a return. Living and earning income overseas does not exempt you from tax obligations.
Don’t take this regulation lightly! The IRS is persistent in finding those who don’t pay what’s due to the government. Here are two tips to keep in mind when you’re getting ready to pay your taxes.
• Understand your IRS tax forms.
The first thing need to do is become familiar with IRS tax forms relevant to earning income outside of the U.S. Have you heard of the Foreign Accounts Tax Compliance Act (FATCA)? This bill requires you to file Form 8939, where you declare your offshore bank accounts, assets, and other sources of income. If you’re unfamiliar with this form, ask FATCA consultants serving clients in Washington, DC, Maryland, Virginia, nationally and worldwide to help you understand your reporting and filing requirements so you avoid penalties and even jail time.
You also have your Foreign Bank Account Reporting (FBAR), which you need to complete independently of the FATCA form. If you think you qualify for a tax exemption or a foreign tax credit, you need to submit Forms 2555 and 1116, respectively.
• Ask tax experts for help.
Proper foreign account tax compliance for Reston, VA tax payers, requires you to declare all your overseas money. Leaving out figures in your report can get you into serious trouble with the IRS. So that you don’t miss out anything in your forms, we highly encourage you to get in touch with a foreign tax expert. In case of an audit, you’ll make a better impression to the IRS if you have a professional representing you.
US International Tax Advisors, for example, has helped many American expats prepare their foreign income tax returns. We have also helped resolve numerous cross-border tax liability issues. We can do the same for you. If you’re having trouble figuring out your tax obligations, don’t hesitate to call us at (844) 796-8565 for assistance.
