It’s coming to that time of year when you may be asking when do you need to start filing taxes as an American abroad. In general, filing taxes does depend on the time of the year. This is because there are certain deadlines for paying and filing your US taxes on time. These deadlines are important to know as they will be different from US tax deadlines.
Why Americans Abroad Need to File Every Year
It’s certainly a fact that every American living abroad who reaches the threshold to file must report every year. The United States and Eritrea are the only two countries in the world that tax their citizens who live both within and outside of their country.
Therefore, this obligation is simply something we Americans abroad will need to accept. Unless we want to give up our US passport or risk the consequences of not filing taxes. However, we do suggest not to go down the route of deliberately not filing. The penalties can reach up to $10,000 if the IRS finds out.
With technology available at our fingertips, many US citizens abroad utilize software or pay professionals to handle taxes for them. However, with MyExpatTaxes software, the power of finances is back in your hands. With user-friendly, smooth software walking you through the filing steps to ensure you file on time correctly.
How to Determine If You Owe Taxes
There is a difference between filing taxes and paying taxes. For example, filing your US taxes means you will fill out and submit information on tax forms to report your worldwide income to the IRS. When it comes to paying taxes, every American abroad who receives income normally gets a percentage of that income taxed, both from the US and the country they are living in. Sound unfair at this point, keep reading to see how to best optimize the situation.
However, the key comes in with tax benefits that can help you as an American abroad prevents double taxation.
Foreign Earned Income Exclusion: Allows US citizens abroad the right to exclude up to $112,000 from foreign earned income starting in the year 2023.
Foreign Tax Credit: A nice benefit for US families abroad, you can gain refundable child tax credits up to $1,500 per qualifying child. Also, you can subtract your income tax amount from the foreign country you’re working in, to US tax.
To determine which expat tax benefit is best for you, the team at MyExpatTaxes will need to look at your entire tax profile, or you can read this blog to learn more.
When to Start Filing Taxes
According to our recent blog, Filing Taxes Abroad in 2023, the deadline to file US taxes for Americans abroad in 2023 will be the similar as in previous years:
- April 18th Normally Americans file on April 15th. But due to a Holiday this year, the normal tax day deadline for US citizens in the states will be the 18th. Americans abroad need to pay income tax but this date or interest will start to accrue.
- June 15th is the deadline for filing taxes, due to expats gaining an automatic extension than citizens living in the US. Americans abroad also have the opportunity to file for an extension to file their US taxes by October 16th.
- October 16th is an extended deadline to file US taxes for Americans abroad. This is so long as you have already requested an extension before the June 15th deadline. Any other year, the October deadline would for October 15th.
- December 15th is the last day to file US expat taxes before the next tax season and year. You will need to submit a personal request for this additional deadline, as there is no standard form.
Don’t worry if for some reason you cannot file your US taxes by the June 15th deadline. Our software can help you by creating an extension for the October deadline (or until December if need be).
All in all, the earliest time we recommend Americans abroad starting to file their taxes would be in January. This is because it’ll be the start of the new year and tax season. However, you do have time to file until June. We know there are some expats out there who like to get their taxes done as soon as possible – and our software can help you get it done in less than 30 minutes.
Need to Catch Up on Back Taxes? Do This…
Perhaps you are a bit – or a lot – behind with filing your US expat taxes as an American abroad. If you truly want to get tax compliant because you missed out on a few years or more filing, you can take advantage of an IRS amnesty program called the Streamlined Procedure.
With a few requirements needed, you’ll be able to take back the years you missed out on filing taxes as a US citizen abroad and get yourself off the IRS naughty list. Using the Streamlined Procedure, you’ll be able to avoid and prevent future tax penalties.
Here at MyExpatTaxes, we have been serving hundreds of our customers with the Streamlined Procedure since 2019. You can contact us for more information by signing up through our app.
Benefits of Being a MyExpatTaxes Customer
In December of last year, we released an early bird special to our customers with a discounted price for the expat tax software, plus a referral service to get credit back on your purchase. Not only will being a customer of MyExpatTaxes give you discounts on our products, but individual tax support, and expat tax benefits you wouldn’t find anywhere else in the digital world.