Why Hire A Specialized CPA To File Your Expat Taxes

One important thing that all the US expats must know is that the US uses a citizenship-based taxation system thus living in any other country does not exempt US expats from filing a tax return every year. You must report all your worldwide income on your taxes and also required to report your foreign bank accounts as well as financial assets like bonds, shares, etc., via FBAR ( foreign bank account report) or FATCA from 8938 if exceed the income threshold.

For US citizens living abroad, the tax return time is very stressful. This is where expat tax professionals can make a huge difference. In this post, we have mentioned a few reasons why one should hire a professional to file your tax return.

1. You Have To File US Taxes

It does not matter where you live and what currency you were paid as well as what taxes were paid to other countries or where the income earned, you are liable to file US expat taxes if earned over the minimum threshold.

2. Taxes Are Very Complicated

You may have to fill form 1040 but your tax return is going to require form 2555 and form 1116 for the foreign earned income exclusion, foreign housing exclusion, and deductions and foreign tax credit. Such forms can be confusing to interpret for taxpayers.

3. Currency Exchange

The internal revenue system (IRS) requires that your income is reported in US currency. Also, the IRS lets the opportunity calculate your income yearly, monthly and daily exchange rate. It can translate into big tax savings if the income you paid in fluctuated over the best year. A professional tax preparer can make sure that the right conversion rates are used and eliminating the hassle of looking for rates as well as converting your income and deductions.

4. States Taxes

We know that every state is different from another in terms of how they tax their citizens who live abroad. In addition to this, some states have no tax and so need no return for expats. While other States may still have you pay taxes as your domicile is in this state caused by a valid driver's license, bank account, voter registration on property. A professional tax preparer will know what each state needs and how to cut ties to avoid taxation with the state if desired by their clients.

US Citizens Living Abroad Expat Taxes have a responsibility to file their income tax return on time and are subject to civil or criminal penalties for failure to file. It can be tempting for US ex-pats to put off dealing their taxes as qualified tax help can be very hard to find outside the US.