Taxes for Expats: A Guide
The government requires resources to run the state and for many governments, the main source of revenue is the taxes they levy from people and businesses. It is required of you, therefore, as a business or citizen of the US government to ensure that you pay your taxes and file your returns in time and also in the accurate amount. If you are found to be on the wrong side of the law, when it comes to paying taxes, such as tax evasion, resistant to pay, filing the returns late and so on, you are punishable by the law. 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. Many governments have adapted to the new technology by having an online page where the citizens can learn more about the tax laws and what is required of them, such info can help you discover more of what is required of when it comes to taxes.
It is important to know that if you move to another country for whatever reason, you are still responsible to your government when it comes to taxes. Living overseas as a US citizen is great but when it comes to the taxes, the process can be complicated and you need to learn more.Discussed in this article are some important things you need to know about taxes as an expat.
Overtime people have come up with different myths and conceptions when it comes to taxes as expats. One of the misconceptions that many people have when they move overseas is that the tax obligation should not be on them. This however is not the case because according to the American tax laws, you’re still obligated to pay the taxes to your mother nation. Many people also believe that because they live abroad they don’t have to file their returns. However, it is to your advantage to file the returns because you will avoid double taxation. Additionally, it is important to note that you can also be taxed on your savings and also the income. Also, if you have more than $10,000 in your foreign financial account, you are expected to file the report with the FBAR which is the sum of the savings, investments, pension plan to name but a few.
As an expat, therefore, it is important that you understand fully what is required of you when it comes to taxes. One of the important facts to know when you live in a foreign country is that for you to use the foreign earned income exclusions, you have to satisfy the requirements which can be obtained by either the 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.