Taxes for Expats: A Guide
Like any other government, the US government is run mostly by the resources the government levies on people in the form of taxes. As a citizen or a business, therefore, you have an obligation to ensure that you file your returns in time and in the proper amount. There are penalties for people who fail to follow the tax laws by evading the law, filing the returns late and so on. If you don’t know what is required of you, you fall on the wrong side of the law which is not good and this can be avoided by equipping yourself with the appropriate knowledge about the tax law.If you determine and to learn more about the law, many governments have an online site that is primarily meant to help you in filing your taxes and also help you learn different things about the tax law.
Living in another country doesn’t mean that you have escaped the liability of paying the taxes because you are still responsible to your government when it comes to paying taxes. Being an expat can be a very challenging issue especially when it comes to the taxes because the process is complicated. If you are an expat, this article is a guide on taxes for expats.
There are myths and misconceptions about taxes for expats. When you move abroad, you will have to pay taxes in the country living in and also your native country and that is why many people believe that the obligation should not be on them when they move abroad. The American tax laws don’t have that opportunity for the citizens because when you’re living abroad, you still expecting to fulfill your tax obligations as a citizen. Also, it is believed that when you move overseas or work in another country, you are not expected to file your returns. Filing the returns, however, is to your advantage because you avoid a scenario where you can have double taxation. The US government will also tax you on your savings and also your income. If your savings, investment, pension, mutual funds to name but a few adds up $10,000, then you are required to file a report with the FBAR.
There are many issues surrounding the issue of taxes and as an American citizen, therefore, there is the need to understand fully your obligations. For example, if you want to use the foreign and income exclusion, it is important that you satisfy the requirements that are there for example, you can prove that by a physical presence test or Bona Fida residence test.It is important to note that you can fill an online tax return from abroad and use electronic money for payment.
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