Filing US taxes every year is no easy task. For Americans abroad, it can be even more complicated so preparation is necessary with expat taxes. Using software like MyExpatTaxes certainly makes the job much quicker and easier. There is no doubt about that. But what if you could make filing your taxes NEXT year even easier? Well, you can! We can’t make your responsibility to file US taxes disappear, but we can help you prepare for filing next year. Here are five things you can do NOW to make your filing your expat taxes smoother in 2023.
1. Start tracking your bank accounts
The best way to start expat tax preparation is to keeping an eye on your foreign accounts. If the total sum of ALL of your foreign accounts reaches $10,000 at any time this year, you must file an FBAR along with your expat taxes in 2023.
On that FBAR, you will have to list the highest balance of each account throughout the year. Even if that balance only happened for one day, you must report it.
Today, many banks offer alerts to track your accounts. Even if you can’t set up an alert, you should keep a close eye. Anytime your account reaches a high, take a screenshot and save it to a file set up for your taxes. Trust us. You’ll thank yourself next year!
2. Set aside 15% of your income for self-employment taxes
This tip only applies to the self-employed who know they cannot be exempt from US self-employment tax. We suggest opening a savings account just for your US taxes. Since most self-employed persons will pay 15.3% of their income in US taxes, you can do yourself a favor and save it now. That way, it won’t hurt when you need to file and pay. And remember – all taxes owed must be paid by April 15th, even when you live abroad.
3. Simplify your investments
The best way to make your life easy when filing and paying your US taxes is to keep your investments US-based. Having investments abroad gets tricky quickly, and if you don’t file your expat taxes correctly in 2023, you could have the watchful eyes of the IRS or FinCen (or both!) on your back.
Where possible, keep your investments in the US. Doing so will lighten both your reporting and tax-paying burden! That doesn’t mean going and selling everything right away. But do remember to consider your US tax responsibilities, even while abroad. Of course, we can only speak for the US, perhaps your local country will not be the fondest of US investments. So it’s good to have extra preparation with expat taxes especially when it involves investments.
4. Get your kids (and yourself) a Social Security number
Did you know your children are automatically considered US Citizens? If, for some reason, your US citizen children (or yourself) do not have an SSN, apply for it now. There are several reasons to get your kids their SSN asap.
- You can claim the Child Tax Credit on their behalf. Yes, even for children born this year. But they need to have an SSN first!
- Thanks to covid, the process can take longer than usual. Apply now before the rush and have their SSN in time to file next year.
- Your kids will thank you later! Ok, they probably won’t. But they will be asking you some questions if they don’t have an SSN as adults. Even when your adult children plan to stay abroad, if they are US citizens, they must file US taxes once they are eligible. For that, they, too, are going to need an SSN. It’s MUCH easier to apply for an infant’s SSN than a grown adult’s.
Are you welcoming a new child this year? Don’t forget them as well. Any children born in 2022 are eligible for child tax credits in 2023. Once you have their Consular Report of Birth AND their passport, you can apply for their SSN. Again, it may take some time, so don’t wait!
5. Invite your friends and family to MyExpatTaxes
When you invite your friends and family to MyExpatTaxes, you earn 20 credits for each person who uses your link and files their taxes. One credit is equal to 1 euro or US dollar. There is no limit to the number of people who can use your link!
But why should they use your link? Because they’ll save 20% too! Yup, it’s good for you and good for them! So, what are you waiting for? Get out, share your link, and start saving yourself and your friends some cash.
Ready to share? Here are two things they should know:
- MyExpatTaxes is the only award-winning and highly recognized software built by expats for expats. Because we are expats, we realize how challenging something as ordinary as filing taxes or even having a bank account can be for Americans abroad.
- MyExpatTaxes has over 1,000 4 and 5-star reviews across Google, TrustPilot, and Facebook. So, while the awards are fantastic, our clients make the work most rewarding.
Filing in 2022
Haven’t filed yet this year? No problem! If you filed an extension you have until October 15th (October 16th in 2023) to finish your tax return. If you didn’t file an extension you should file right away to minimize the chances of paying late fees or fines. Never filed? No biggie. We can help you by using the Streamlined Procedure to get you caught up and in good standing with the IRS.