Penalties for Not Filing
Penalties can get serious if you are an American living abroad, and have unfiled tax returns – failing to file on time. For US expats it’s June 15th of every year, with an option to request for an extension.
Unfortunately, if you do not file and the IRS catches you, these are potential penalties:
- Paying a fee $10,000 or 5% will be tact on interest on your taxes until it reaches 25%
- You won’t be able to renew US passport if you are on the hook for a high tax bill
To learn more about how the IRS calculates penalties, please click here.
Did you forget or not know how to file? If you were innocent in the matter, you can use the Streamlined Filing Procedure (see below) to get back on track.
Filing For Previous Years and Back Taxes
Did you miss filing one, two or more tax returns? You could have a backlog of unfiled tax returns on queue, which you’ll need to do something about. As an American expat or Green Card Holder living abroad, if you forgot or didn’t know you had to file US tax returns and the FBAR annually, there’s a tax amnesty solution for you.
The Streamlined Procedure allows you to avoid tax penalties and fees and put you back on the IRS good list. It’s a specific process to walk through, where you will need to have information from the last three years (yearly salary, investments, etc).
Qualify for the Streamlined Procedure
Your actions must be innocent for not filing tax returns in the past. This could mean you didn’t know how to file, were unaware of this tax obligation, or forgot. You’ll need to sign a statement stating this fact on Form 14653 (or via our expat tax software) when you start filing through this program.
Requirements to File Back Taxes:
You are eligible to use the Streamlined Procedure if you fall within the following guidelines:
- You did not live in a home in the US for the last three years
- Were living outside of the US for at least 330 days in the year
- You have not filed a federal tax return in the last three years
- Haven’t filed amended or delinquent tax returns in the past
- Haven’t filed the FBAR within the last six years
What do you need for the Streamlined Procedure?
- Three years of back tax returns (not including this year’s return)
- Six years of FBAR reports (not including this year’s report). FBARs are only required if you have had over $10,000 in all your foreign financial accounts at any time during the year
- Signed statement on the Certification by U.S. Person Residing Outside of the U.S.
How Much Does it Cost?
Our expat tax software and Streamlined Procedure service has one of the most affordable packages for Americans abroad. Even if you have a more extensive or complex tax situation, we will not increase our fees for you.
It is a total of 696 Euro including VAT broken down into the following ways: 4 years of tax returns at 149 Euro each (including this tax year’s return), plus six years of FBAR reports (if need be), and 100 Euro for extended support that will guide you through the process and make sure all your questions are answered. We say that’s pretty reasonable!
Search Tax Guide
Tax Guide Topics
The first US stimulus checks for Americans abroad have been sent out in March 2020. Then, in 2021 a second check was released in January, and the third round happened…
Self-Employment Taxes If it is certain you work for yourself and are in control of the services you perform, then you are self-employed and income you receive from this specific…
Retired or Planning to Retire? If you are planning to retire, you need to know that Americans, both in the US and abroad can gain retiree support benefits from the…
Renouncing US citizenship is possible as an American abroad, though not recommended. You’ll need to be tax compliant for five years, sign an oath, pay a large exit fee, and…
Every foreign bank account you open as an American abroad means you are connected to the FATCA law. This law allows the US Department of Treasury to access your bank…
If you have a family, you can save money with US taxes through the child tax credit and foreign housing exclusion. The child tax credit allows you to get refundable…