Correctly File Your Taxes While Living Abroad

You may not know how to file your taxes if you are an American citizen working and living overseas. You may not even realize that the US government and the IRS essentially require that you file your taxes, even if you are outside of the country. Although things are slightly different, the process is relatively simple, and it is certainly a better choice than not filing at all, particularly if you would like to avoid a serious IRS problem.

Most people believe that they have a free pass for not filing their taxes if they work outside of the country. In conjunction, they also assume that they do not have to pay their taxes, as well. This is not the case, unfortunately. Whether you reside in the US or in another country, the IRS requires and expects everybody to file their tax returns, otherwise they'll be subject to a possibly considerable IRS problem.

When residing in a foreign country, citizens and residents of the United States of America can accomplish two types of tax forms. These are the the IRS Form 2555-EZ and Form 2555 (Foreign Earned Income).

Similar general rules apply. Your tax return has to be filed at the 15th of April every year, and an automatic extension is given if you need more time. You'll have more time to file the correct forms and pay the correct tax debts due with the automatic 2-month extension. But if you wish to utilize the 2-month extension, you need to actually attach an official statement explaining and confirming that you actually qualify for the extension.

An issue that confronts people who have recently moved overseas is that they did not get W-2 forms from their employers because they were sent to their old address; therefore, losing their tax information. The honest and bitter truth is that you'll be responsible for getting those documents. It has to be accomplished, regardless if that requires having your company to send a new copy or getting a good friend to find your mail. Another option is having the official copies sent via the regular mail while electronic copies are sent to you through email. This will help you prevent an IRS issue and accomplish your tax returns on time.

You have a few options in how to file your tax return if your spouse is not an American citizen. Among those options is to file as Married Filing Separately. This means that you, as a taxpayer, would just report your own income that you've made for that year. However, if you also have children and you are the provider of more than half of each child's support, then you can file under the status of Head of Household. Finally, you can choose to identify your spouse as a resident alient as a third option. You would actually be filing as Married Filing Jointly for tax reasons.

There are numerous differences and slight aspects when it comes to filing taxes while you're working and living overseas. For most people, it is highly advisable to just consult a professional tax preparer to prevent having an IRS issue.

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