International taxes can be complicated and stressful when you move abroad. It's especially difficult when there is a language barrier and you don’t understand the local rules and regulations.
Taxes for expats is always a lime-light topic, filling them at the right time is important. Each country has their own rules and regulations, but it’s especially important for American expats to file in both countries, due to the taxes for expats regulations in the United States of America.
For more information on tax legislative and regulatory issues affecting Americans living overseas, visit: American Citizens Abroad (ACA) a qualified 501(c)(4) non-profit membership organization that is the premier thought-leader on legislative and regulatory issues affecting US Citizens living and working overseas. ACA supports efforts that provide tangible results and practical solutions to legislative and regulatory problems faced by Americans overseas as well as, provides them with information on the latest changes in regulations and the tools for managing their lives abroad.
Here are some things to keep in mind as an expat filing international taxes:
Taxes for Expats
As an expat moving abroad, it’s important to understand the new tax system and how tax burdens apply to citizens and residences. To avoid getting in trouble with taxes while living abroad, here are some things to keep in mind:
- Tax season: fiscal year and tax return dates
- Regulations for joint tax return (if you are married)
- Tax form submission deadlines
- Late tax fees
- Types of taxes and filings
It’s important to discuss the tax laws in a foreign country before moving abroad to determine how to process the paperwork and ensure you are in a good financial place, because taxes are very different in each country and depends greatly on the type of work you’ll be performing while abroad.
As you speak with a chartered tax professional that understands where you are from and where you are moving to, be sure to cover the international taxation topics in order to better understand what types of taxes are involved for your international relocation, including:
- Property tax
- Global taxes
- Excise taxes
- Tax on income
- Gift tax
- Child tax credit
- Tax relief
- Federal taxes
- Corporate income tax
- Estate tax
- Sales taxes
- Foreign tax
Furthermore, there are more different taxes vary by country. Also, few taxes are directly deducted from salaries, but the best is to coordinate with a tax consultant who will navigate with best tax information.
Filing taxes depends heavily on the source of income you’ll be making while living abroad. Whether you are self employed, working abroad for a corporate relocation, entrepreneur or taking a gap year, it’s important to keep all documents organized in preparation for tax season. Being organized with your financial and tax documentation will make filing taxes a more stress-free experience. Here are a few things to check before filing your taxes:
- Self employment income
- Mining income
- Rent tax
- Business tax
- Investments and savings tax
- Pension tax
- Benefits from the government
One great way to save on tax filings is to keep deductible documents to file during tax season. If you don’t save the tax-exempt purchases throughout the year, it’ll be hard to keep track of those documents in time for filing, so we recommend keeping those documents safely organized in a single place so you can present to your tax accountant for your tax filing.
Here are a few non-taxable exemptions to discuss with your tax accountant:
- Health Insurance
- Pension plans
- Medical bills
- Charity payments
- School payments
- Mortgage payments
But as you prepare for your move abroad, we recommend speaking with a chartered tax accountant that can review your personal tax situation and how to best prepare you for the taxes in a foreign country. Get setup on our expat moving platform to speak with an expat-recommended tax accountant to help you save money and prepare for the next tax season.