With the Foreign Earned Income Exclusion (FEIE) you can exclude up to $108,700 from income taxes.

There are 2 criteria:

1. If you work full time in a foreign country for the entire calendar year (Bonafide Resident)

2. If you worked outside the US for at least 330 days in the last 365 days (Physical Presence Test)

Learn more about the Foreign Earned Income Exclusion for Expats.

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With MyExpatTaxes you can file for an extension on your US taxes in a few simple steps. Best of all it's completely FREE! Here you can find a step by step guide on how to do it:

https://www.myexpattaxes.com/expat-tax-tips/extensions/how-to-file-us-tax-extension-abroad-for-free/

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If you file your FBAR too late, there is still a way to get tax compliant and avoid penalties. Here are two ways you, as an American expat, can catch up and file your late FBARs:

If you already filed your tax return (either through us at MyExpatTaxes, another tax company, or on your own):

You can back file your FBAR through our online portal or the FinCen portal. You can do this for any qualifying years and need to explain why you didn’t file them before (i.e., you were unaware you had to do them).

If you have not filed your tax return yet:

You can make up for lost years by using the Streamlined Procedure tax amnesty program. This program is exclusively for Americans abroad who didn’t know they had to file taxes from abroad without facing tax consequences and fees.

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There is always an option to renounce your US citizenship if you want to avoid US taxes.

After renouncing you wouldn't be required to file your us taxes anymore. However, renouncing your citizenship will cost you $2,350*, and you could also be subject to an "exit tax".

Additionally, tax obligations before renouncing will remain until you fulfill them, regardless of whether or not you renounce your US citizenship.

You can be subject to exit tax if you haven't filed properly for the last five years, if your net worth is more than $2,000,000 on the day of renouncing, or if your us income tax liability amounts to more than $165,000

Additionally, you could lose your right to enter US among other privileges. Something not to take for granted.

*This sum is subject to change

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If your spouse is not a US citizen and has no Green Card, then he/she does not need to be included on your tax return. Instead, you should file as "Married Filing Separately" or "Head of Household" – if you have US citizen dependents.

This is usually the case for Americans who live outside of the United States and are married to a non-US Citizen.

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Yes! You will need to contact your local Embassy or Consulate for an appointment.

You do have to make sure to do it in person because The Social Security Administration needs to make sure that the SSN issued won't be used by individuals who have fraudulent intentions.

Learn more.

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It's simply the law that if the tax exclusions and benefits still make you susceptible to paying US taxes, you need to do it.

This tax-paying duty from the IRS is found in your passport and is a part of your US citizenship. Some people decide to withdraw their duty to file and pay US taxes while abroad, but the renunciation process is complex and expensive - we don't suggest it!

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You only need to report rental property if you are making income out of it (such as in the case of renting out your home/property), or when you sell it.

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If you don't have a foreign account you don't have to prove it. However, if you do have a foreign account and don't report it, you could get fined, because the IRS will find out.

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If spouses only have joint foreign accounts then, they can file one FBAR. However, if both spouses have at least one individual foreign account then they have to file one FBAR per person.

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Yes, if you close the financial account, you should report it. Also, don't forget to report the closing balance of the financial account in FBAR and FATCA forms while filing your taxes.

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When you are late in your payments, the IRS will ask you to pay them interest. When they are late in their refunds to you, they will return the favor and pay you interest.

However, the catch is that this interest is fully taxable on your US Tax Return. To report interest paid from the IRS in MyExpatTaxes, please do the following:

Choose the Investment Option on
https://app.myexpattaxes.com/wizard/grossincome

Choose the Interest Option on
https://app.myexpattaxes.com/wizard/investment/

Add in your IRS interest on
https://app.myexpattaxes.com/wizard/interest/2021

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When you’re US citizen, you may be required to report your non-US financial accounts to the FATCA. This is the Foreign Account Tax Compliance Act (FATCA) - an important development in US efforts to combat tax evasion by US persons holding accounts and other financial assets offshore.

The FATCA generally requires that foreign financial Institutions and certain other non-financial foreign entities report the foreign assets held by their US account holders or be subject to withholding on payments. Then, the HIRE Act also contains legislation requiring US persons to report,depending on the value, to their foreign financial accounts and foreign assets.

Under FATCA, certain US taxpayers holding financial assets outside the United States must report these assets to the IRS on Form 8938, Statement of Specified Foreign Financial Assets. Reporting thresholds vary based on whether you file a joint income tax return or live abroad.

If you are single or file separately from your spouse, you must submit a Form 8938 if you have:

  • More than $200,000 of specified foreign financial assets at the end of the year and you live abroad;
  • Or more than $50,000, if you live in the United States.

If you file jointly with your spouse, these thresholds double.

You are considered to live abroad if you are a US citizen whose tax home is in a foreign country and you have been present in a foreign country or countries for at least 330 days out of a consecutive 12-month period.

For more information, please visit the IRS FATCA page.

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Crypto are treated like investments like stocks and any capital gain/loss is reported on Schedule D.

Here are some other points to know:

  • The cost basis is the amount of money invested in a cryptocurrency
  • Total proceeds is the money you got from selling the cryptocurrency
  • The gain/loss will be calculated based on that

You can enter your details under Investment Income section – Stock/Property/Crypto Sales as so:

Learn more about cryptocurrency reporting for expats.

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When it comes to deduction for donations and charity: Only donations to qualified organizations can be included. Additionally, you may check on this IRS website if your organization is eligible to receive US tax-deductible contributions here.

We recommend not to include any single donation of $250 or more (10 donations of $25 do not count); if you do NOT have a receipt.

The statement from the charitable organization must show:

  1. amount or description of donation and
  2. if they performed any services or gave you goods in return for the donation

You may add it directly in the software by selecting “Itemized Deductions” under the Deduction section on the navigation pane:

Then, you have to choose “Donations” under the Additional deductions option to add it.

You will see what are the deductions that you can add:

You can always reach out to us via our Live chat! Just hit the chat button or email us at team@myexpattaxes.com if you need any help.

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How can expats contribute to their US Roth IRA? First let's look at what an IRA is:

Roth IRA: You can make monetary contributions that already had taxes paid (i.e.: after-tax). From this, your earnings and withdraws can potentially be tax-free (as long as you meet certain conditions). You can learn more about it thru this link IRS page.

To determine your IRA contribution limit, you’ll need to look at your filing status, taxable compensation, and adjusted gross income (AGI). You are either eligible for the maximum amount, a reduced amount, or not eligible at all from these three factors. Check out this calculation from TIAA to see how much you can contribute.

Keep in mind: When you use FEIE (Foreign Earned Income Exclusion), this might mean that ALL of your compensation is excluded from US taxation, therefore you have $0 taxable compensation.

Adding Roth IRA contributions on the MyExpatTaxes software

To add your contribution to the software, you’ll need to select the “IRA Contributions” tab on the navigation panel left of the page:

ira contributions myexpattaxes

Then select “Yes” to the following questions below:

ira contributions feature myexpattaxes

Then, choose ROTH IRA to input your contribution details:

roth ira myexpattaxes features

Once selected, you can choose the following option that applies to you:

IRA contributions page myexpattaxes

To learn more, you may visit this page from our website.

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Yes! The Foreign Housing Exclusion allows you to deduct the excess of housing expenses, paid by employer-provided amounts that are over 16% of the FEIE amount of that year. Be aware though, there is a limit to how much foreign housing expenses you can deduct.

Using this housing exclusion can help, especially if you earn more than the maximum FEIE allowed amount. The Foreign Tax Credit can also be a huge help, which is also supported by the MyExpatTaxes tax software.

In addition to rent as a qualified expense for the Foreign Housing Exclusion, the following are also applicable:

  • home utilities (think electricity)
  • personal property insurance
  • accessory rentals
  • household repairs

To input it in our software, you’ll see just need to select the “Housing Expenses” section in the navigation panel:

deduct my housing expenses

foreign housing deductions myexpattaxes

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When you’re a US Citizen or a Green Card Holder, you may claim the stimulus check wherever you are as long as you’re eligible and you’re filing US Taxes (or planning to file them).

You’re eligible for stimulus checks as an expat if:

U.S. residents will receive the Economic Impact Payment of $1,200 for individual or head of household filers, and $2,400 for married filing jointly if they are not a dependent of another taxpayer and have an eligible Social Security number with adjusted gross income up to:

- $75,000 for individuals

- $112,500 for head of household filers

- $150,000 for married couples filing joint returns

Taxpayers will receive a reduced payment if their adjusted gross income is over $75,000.

IRS

Learn more about Stimulus checks in our expat guide.

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Usually, when you file a US tax return, you’ll be asked to provide your US banking details, which is where the IRS direct deposits any refunds you may have. If you do not have any US bank account, we recommend creating a virtual account with Wise. Otherwise, the IRS will send your stimulus checks as a paper check by mail to the address indicated on your last tax return.

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The short answer is, yes - you can still claim stimulus checks if you’ve missed the deadline - and if you’re eligible.

You’re eligible for stimulus payments if:

U.S. residents will receive the Economic Impact Payment of $1,200 for individual or head of household filers, and $2,400 for married filing jointly if they are not a dependent of another taxpayer and have an eligible Social Security number with adjusted gross income up to:

- $75,000 for individuals

- $112,500 for head of household filers

- $150,000 for married couples filing jointly

IRS.gov

Also, you would need to consider few things: Are you filing your taxes regularly? (Your last filing is 2019).

If YES, did you file your 2020 US Tax return?

  • If another “YES”, you may file for an amendment and claim the stimulus as recovery rebate.
  • If “NO”, you can just file a regular 2020 return and claim the stimulus as a recovery rebate credit.

If “NO”, when was your last filing?

  • If it’s more than 3 years, you may still be able to claim it by filing under the Streamline Program.
  • If it’s less than 3 years, you may just file a return for the years you’re required to file.

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The Recovery Rebate Credit, in essence, is a tax credit that you’re able to use against your US income taxes as an American living abroad. This credit was paid in stimulus checks (officially known as Economic Impact Payments) in 2020 and early 2021.

In short, the Recovery Rebate Credit can either lower the amount of taxes that you owe or increase the total of your refund.

To learn whether you’re eligible for the Recovery Rebate Credit, you’ll need to look at how much you received on your stimulus checks.

  • For the first round of checks, the full payment was $1,200 for individuals or $2,400 for married couples filing jointly. For each qualifying child, it was $500
  • The second round of stimulus checks offers full payment of $600 for individuals, $1,200 for couples filing jointly, and $600 for each qualifying child

If you did not receive the total amount of both of these payments, you could be eligible to claim the Recovery Rebate Credit.

In addition to these criteria:

  • You must also have been a US citizen (or US resident alien) in 2020
  • Have a valid Social Security number (that qualifies you for employment) issued before your 2020 tax return due date
  • You cannot have been claimed as a dependent on someone else’s tax return for the 2020 tax year
  • Your adjusted gross income did not exceed the IRS set thresholds (starting at $75,000 for single filers)

It’s critical to note that, even if you didn’t file a tax return this year or aren’t usually required to file a tax return as a US citizen abroad, you DO have to file a 2020 tax return to claim the Recovery Rebate Credit. The IRS used to provide a Non-Filer tool on their website, but this tool no longer exists.

Instead, you must file a tax return to claim the Recovery Rebate Credit. The Recovery Rebate Credit worksheet can be found in both Form 1040 and Form 1040-SR on your tax return, and in the MyExpatTaxes software. Either of these forms will notify the IRS that you are indeed eligible to receive this credit. Again, if you received the full amount of both stimulus checks, you will not qualify for the Recovery Rebate Credit.

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There are two ways you as a US expat can avoid penalties from the IRS:

  1. File your US tax return with MyExpatTaxes or request an extension by June 15th every year
  2. Make up any years of missed filings through the Streamlined Procedure

If you skip out on filing US taxes from abroad, the IRS could collect old tax info on you and approximate how much tax money you owe. Therefore, it is possible you could pay more than you need to. Plus you could get penalized from the IRS for faliure to file, faliure to pay or owning a dishonored check.

Learn more on how not to get in trouble with the IRS.

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Do you need to make up years of back taxes? Maybe a couple of FBARs or two? No worries because the Streamlined Procedure can help you get back on track, IRS penalty-free.

In 2014 the IRS developed the Streamlined Procedure to help US expats catch up on taxes without being subject to penalties. This program also allows you to file amended returns, and claim missed returns on qualified foreign pension plans.

To be eligible for the Streamlined, you need to:

  • Not live in a home within the United States for the last three years
  • Lived physically outside the United States for at least 330 days
  • Did not file a US federal tax return, delinquent, or amended returns for the last three years
  • Have not filed the FBAR in at least six years

Try the MyExpatTaxes Streamlined Filing Procedure and file 3 years of tax returns and 6 FBARs without any failure-to-file or FBAR penalties.

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Hefty penalties can come your way if you forgot or didn’t know you had to file the FBAR, or Foreign Bank Account Report. Depending on your circumstance as an expat, you may have to pay penalties:

penalties not filing the fbar expats
Source: https://www.irs.gov/businesses/small-businesses-self-employed/report-of-foreign-bank-and-financial-accounts-fbar

As you can see, these penalties are expensive. To prevent paying such fines, check out our Streamlined Procedure program where you can make up years of back taxes and FBARS for an affordable price.

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Expats have an automatic extension to file the FBAR until October 15th. The FBAR only needs to be filed if you have had $10,000 or more combined from foreign financial accounts at any one time during the year. Learn more about the FBAR.

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Anyone who must file or pay US taxes from abroad are required to file the FBAR once their financial accounts have reached the FBAR filing threshold as stated below. The best thing is that you can file your FBAR within minutes through the MyExpatTaxes app!

The Foreign Bank Account Report is a form needs to be filled out if you have had $10,000 or more combined from all foreign financial accounts at any one time during the year. The filing deadline is October 15th, and penalties for not filing can be hefty.

Calculating Total Value for FBAR

Curious to know about calculating the total balance for all your overseas financial accounts? Here's an example:

You have 3 bank accounts: 2 from Italy, 1 from the US. You have a pension set up in Italy because you work for an employer, and life insurance from an Italian company you have been funding for 10 years.

Now, you need to calculate the maximum balance of the year for all foreign accounts – ignoring US accounts because they don’t count. Sum up the total from your foreign financial accounts, and convert the money into USD. Now you can determine whether you need to file an FBAR.

Learn more about the FBAR.

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You may wonder if there are exceptions for US expats regarding having to file a US tax return.

First off, the following individuals need to file US taxes:

  • US citizens (living in the US or abroad)
  • Accidental Americans
  • Green card holders
  • Permanent Resident / Resident Aliens of the USA
  • Non Resident Aliens who have US income

You are allowed to not file a US tax return if you made minimal or no income over the past year. However, we suggest to be safe and file a return anyway to be in good standing with the IRS.

However, if you are a US citizen living abroad and have had $10,000 or more total from all foreign financial accounts at any one time during the year, you'll need to file a Foreign Bank Account Report (FBAR). This is even if you have signature authority over a financial account abroad, like sharing a bank account with your Non-US spouse.

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Filing Form 2555 (The Foreign Earned Income Exclusion) is commonly used by US citizens who live outside the US. The FEIE allows any taxpaying qualified US expat the right to exclude a certain amount of foreign earned income on their tax return. Foreign earned income can be your salary, wages, or any other amounts paid to you for personal services rendered by you abroad. You may visit this link from our website to know more.

Please see the steps on how you can fill out Form 2555 using the software:

Firstly, log into your account. If you are on our website, you'll just need to select the "Get Started" button; as seen below:

form 2555

Then, select "Sign in." There are two buttons to sign in you can choose any of them.

feie myexpattaxes

Once logged in, you may select the “Foreign Earned Income Exclusion Form” on the navigation panel on the left side of the page:

foreign earned income exclusion myexpattaxes

You can always reach out to our Support team at team@myexpattaxes.com if you need any help while filling the questions. Or you can request a chat on our website for real time assistance we are open during business days.

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Here are the deadlines for filing your 2021 taxes in the 2022 tax season:

April 18th: The US tax filing deadline for US taxpayers living with the United States., and the payment deadline for expats who owe taxes.

June 15th: The US tax filing deadline for expats. Expats can file a free extension by the deadline to receive a greater extension.

October 15th: The extended tax filing deadline for expats, and the FBAR deadline. If you need more time to file, apply for a second extension by mail as soon as possible.

December 15th: The very last day for people to file and pay US tax before the tax season closes.

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If you have not formally renounced your Green Card, you are still considered a Resident Alien for tax purposes and are required to file a US tax return to report your worldwide income. Your Green Card only expires for immigration purposes, not taxation.

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Yes, you will need to include any joint accounts on your FBAR, however your non US citizen/Green Card Holder spouse does not need to file their own FBAR.

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There is no tax on the FBAR values; FBAR reports are for informational purposes only.

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While you should always have documentation of your income, if you are confident in your input and estimate on the higher side when it comes to income earned, you can still use the MyExpatTaxes software.

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Yes, you can apply Social Security Numbers for them. If you have an extension filed in place, you have until October 15 to submit your tax return. But please be advised that you can only claim them for the current year's tax return!

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You should file an FBAR if the total of all financial accounts combined exceed the $10,000 threshold. Even for one day! Keep in mind that you won’t be taxed on your foreign bank account because of this specific form. To find out which types of financial accounts have to be reported on the FBAR, check out our blog.

The deadline for filing the FBAR for US expats is October 15. We at MyExpatTaxes always ensure that our clients file an FBAR because of the penalties that come with not filing one. We prefer you be safer in this regard and file even though your accounts don't reach the threshold.

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Married couples who file jointly and are both US citizens/Green Card holders with a valid Social Security Number or ITIN can file jointly using the Streamlined Procedure.

Keep in mind that if you are filing jointly, the price of the streamlined procedure does not increase. Here you can find out more about the Streamlined Procedure

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If your spouse is not a US citizen or Green Card holder, then he/she does not need to be included on your tax return. Instead, you should file as "Married Filing Separately" or "Head of Household" - depending on your family situation. Learn more about each tax profile and filing thresholds in our expat guide.

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US citizens and Green Card holders are taxed on their total worldwide income.

Does that mean that you will be double taxed?

Not if the country in which you made your income has a tax treaty with the US. See the list of countries that have a tax treaty with the US.

Furthermore, Foreign Earned Income Exclusion (FEIE) is a tax benefit which allows US expats to exclude up to a certain amount of foreign earned income from your US taxes. In 2021, for the 2020 tax year, you can exclude up to $107,600 of foreign earned income.

How to qualify for FEIE?

There are two ways.

  • Physical Presence Test: To pass the Physical Presence Test, you will need be outside of the US for 330 full days in a consecutive 12 month period, that begins or ends in the tax year.
  • Bona Fide Resident Test: To pass the Bona Fide Rest Test, you will need to be a resident in a foreign country and be subject to local income taxes for at least a full tax year.

If you would like to know more about US expat taxes, feel free to check out our Expat Tax Guide

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