Tax Tips for U.S. Americans Abroad
Perhaps you’ve realized the fact that you need to file your worldwide income as an American expat abroad. Or you’re in the midst of completing your tax return and need to know where to send it. Don’t worry, we got you covered. In this post, we’ll be highlighting all you need to know before you send that tax return. Plus, we’ll share the actual address to send US tax return from abroad as well.
Do You Need to File an Extension?
Naturally, US expats have the automatic extension to file and pay their US taxes until June 15th.
However, due to specific circumstances, there is a possibility to extend your deadline furthur, to the October 15th deadline.
In order to do this, Americans abroad need to file an October 15th extension form BEFORE the June 15th deadline. It informs the IRS you are not able to make the deadline, even despite given an extension. However, the truth is many US expats may need an additional 4 month extension.
Some may have not known they needed to file taxes while living abroad. Or perhaps, a personal circumstance prevented them from actually doing so on time.
Don’t fret if you can’t figure out how to file an extension, just sign up through our app and a team member will be available to assist you.
Make Sure You’re Not Getting Double Taxed
A very important aspect to be aware of when filing your US tax return living abroad is double taxation. Make sure you as an American abroad are not paying or being taxed more than you should be by understanding what double taxation is.
Double taxation is the action of paying taxes twice on the same bucket of income. The US is one of only two countries in the world that makes its citizens report worldwide income, even if they are abroad. If an American lives and works abroad, they will be doubly bound to the tax laws of both the foreign country and the United States.
However there is a silver lining because US expats can prevent being double taxed due to the numerous international treaties and policies enacted. You can check to see if your foreign country made the list here.
Even if we still have to file our US taxes, we can rest a bit easier knowing that at least the US makes agreements with countries around the world so Americans abroad can be safe from double taxation.
The MyExpatTaxes program has all the forms and files online you need to ensure you won’t pay more than you need to or be double taxed.
Additionally, read below to see how else you can save yourself from being double taxed.
Utilize Expat Tax Benefits Before Sending Your Form
Before you send in that US tax form in the mail, we suggest you check out if you utilized all the expat tax benefits:
The US has provided 3 specific expat tax benefits that can help you stop paying more than you should.
Foreign Tax Credit
Generally, you can get a $ for $ (euro, pound, yen, etc.) credit from the income taxes paid to your host country against your US tax liability.
When you pay foreign income taxes, such as UK income taxes, you can use those amounts to offset your US tax bill. For example, if you would owe $5,000 in US taxes but have already paid 7,000 GBP taxes to the UK Government, the US will allow you to reduce your tax bill to $0.
You will need to claim the foreign tax credit on Form 1116.
Foreign Earned Income Exclusion
The FEIE gives US expats the right to exclude up to $105,900 (for the 2019 tax year) on any earned income sourced outside the US. This is known as foreign sourced income. Plus, it doesn’t matter if you’re a short-term or long-term expat to take advantage of this benefit.
To check if you are qualified for the Foreign Earned Income Exclusion you’ll need to take two tests. The Bone Fide and Physical Presence test which you can take here.
Foreign Housing Exclusion
If you earn more than the FEIE exclusion amount then you can score an additional expat tax benefit. It’s called the Foreign Housing Exclusion.
This benefit allows you to deduct the excess of housing expenses, paid by employer-provided amounts that are over 16% of the FEIE amount of that year. This means that any qualified housing expenses over $16,944 might be eligible for US tax exemption.
We at MyExpatTaxes also have the housing exclusion within our software. It’s helping hundreds of expats on a weekly basis.
Have You Caught up on Back Taxes?
Before you should know the address to send US tax return from abroad, try this. See if you have completed all your previous federal tax forms effectively. This ensures you are in a positive tax compliant situation.
Otherwise, if you’ve missed out on 3 years or more on filing or paying taxes to the US, you need to file these back taxes before you have to pay penalties.
We suggest to do yourself a favor and assess if you are eligible for the Streamlined Procedure. If you are, you will not be subject to tax penalties. Plus, you can utilize the MyExpatTaxes software to help solve your case.
The Address to Send US Tax Return From Abroad Online
If you’re a US citizen living abroad, then you can send your US tax return from abroad to the following address:
Department of the Treasury
Internal Revenue Service Center
Austin, Texas 73301-0215
If you want to send your US tax returns virtually with no stress, then we can help you out. Just sign up through our app and allow our team to submit your tax return electronically for you. For this, our all-inclusive price is 140 Euro including VAT. File your federal tax return easily and stress-free with us.
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