To remain competitive in today’s global marketplace, companies and individuals cannot be concerned with traditional borders or their constraints. In a global economy, international business, and therefore international tax affect increasingly more entities and individuals. Complicated tax planning, reporting, and compliance challenges abound. Individuals and businesses seeking international investment opportunities need to understand the tax issues and business risks associated with foreign ventures and international investments.
Similarly, foreign companies venturing or investing in the United States, requires attention to tax planning and structuring. International expansion brings both growth opportunities and associated challenges. Expertise is required to address the tax implications of international exposure. Whether you are determining the needs and opportunities of an existing operation or evaluating potential new ventures and investments, our team of international tax experts can help you address both the outbound and inbound international tax issues that affect partnerships, individuals, trusts, and corporations.
In addition, our international tax experts have experience helping organizations comply with the Foreign Account Tax Compliance Act (FATCA).
Moving abroad is an exciting time in your life! Whether you’ve been abroad for years or whether you’re still packing your bags, you may not have given much thought to taxes for expats. Unfortunately, leaving the United States does not relieve you of your tax obligation. Put simply, international taxation is a nightmare for many Americans. Every U.S. citizen – regardless of whether they are living in the U.S. – must file a tax return with the federal government. From Foreign Housing Deductions to Form 1040, there’s no end to the paperwork. Luckily, an international tax accountant can help guide you through the process of paying international taxes.
As American tax reform dominates recent news cycles, you may have noticed the continuance of a phenomenon known as “double taxing”. Double taxing is a tenant of our current tax system that remains unchanged by the recent tax bill. Under double taxing, Americans are taxed both by their host country and by the United States. Double taxes for expats significantly reduces take-home earnings without providing a service in exchange for the taxation.
Our experience with the taxation of U.S residents working abroad and foreign citizens working in the U.S. has provided us with an extensive base of knowledge in the area of international taxation. We offer the careful attention required to address tax implications of international expansion as well as exceptional customer service. We know that it’s hard enough to move abroad, and we believe that expat taxes should be the least of your worries. So what does it mean to work with an expert international tax accountant? In addition to providing great service, we can also answer your most pressing questions:
There are numerous challenges involved in filing taxes for expats including dense tax legislation, reconciling host country tax, as well as confusion surrounding federal and state returns. You are required to prepare your return within the United States tax year even in circumstances where your new country of residence operates under a different tax schedule. In addition, you are obligated to keep a careful record of taxes paid in your host country in order to receive a tax credit for any taxes you’ve already paid. Although many expats will not owe money, failure to file will lead to financial penalties. The IRS also spends a great deal of money pursuing individuals who attempt to dodge taxes by living overseas.
This is a good question and it’s one many other expats have asked before! The original intention of expat taxes was to collect funds from draft dodgers who moved to Canada during the Civil War. So why is this system still in place? Taxes pay for public services, such as roads, libraries, and the postal system. If you are no longer a resident of the United States, you may not want to fund these programs. Ultimately, there’s no clear answer to be found. Although there was some discussion of moving to resident based taxation during the most recent tax reform, no action has been taken at this time.
Put simply, hiring an international tax accountant is the best way to ensure that you are not overpaying when it comes to your international taxes. The complexities of international taxation require a substantial investment of time. Additionally, you may not be aware of the latest changes in tax legislation and may miss deductions that you would otherwise be entitled to. What’s more, there’s no clear road map when it comes to taxes for expats. Depending on your former state of residence you may still be required to file a state tax return in addition to a federal tax return. When you hire an international tax accountant at Azran Financial, you can take advantage of decades of experience as well as rigorous review procedures.
The U.S. Treasury estimates that approximately 10% of all expat tax returns are filed incorrectly, which can result in penalties or overpayment. When you partner with us, your international tax accountant will help you retain as much of your hard-earned income as the law allows.
Although it may be tempting, moving abroad does not mean you can ignore your U.S. taxes. Many variables affect how much expatriates pay Uncle Sam – including whether you deduct your foreign taxes, your host country, and your employment situation. Although the IRS provides some reading about the process of paying international taxes, your exact tax liability can still be difficult to determine.
If you take up residence in a foreign country without exploring the tax ramifications, you may find yourself paying more than you may have expected in federal and state taxes.
Some of the important considerations include:
Although the IRS offers numerous deductions, credits, and exclusions to expats, taking advantage of them is not straightforward. You may need an international tax accountant.
Moreover, some exclusions vary by country, and there are others which must be claimed during a specific portion of the year. In addition, each requires supporting forms and worksheets, which can be more than cumbersome to prepare.
For people who are either planning a move or have already settled abroad, we offer the following tax services:
These are the most common expat tax services we offer – but it’s not our full list. Please contact us to discuss your needs if you don’t see them reflected here.
Just because the process is complicated, there’s no need for expats to pay more than require or suffer unnecessary penalties and interest. An international tax accountant is a great investment.
Let us help you navigate the tricky waters of U.S. taxes for expats. Give us a call or send us an email today – and use more of your money to enjoy your time abroad!
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