Living Abroad Doesn’t Mean You Can Say Bon Voyage to US Taxes!

It’s long been a joke that the only things certain are death and taxes, and while this is perhaps a comic overstatement (at least as far as taxes are concerned), it is indeed really, really hard to avoid paying taxes – even if you live abroad. Today, we’re diving into an important reminder for those of us making our homes outside of the United States: yes, you still have to file and pay taxes. Whether you’re soaking up the sun in Bali, laying low in Vanuatu, or sipping coffee in Paris, Uncle Sam still wants his cut.

Here’s the deal: if you’re a U.S. citizen or resident alien living outside the country, the IRS considers your worldwide income fair game for taxation. That means everything from your salary to those tips you pocketed while bartending in Barcelona is up for grabs. The good news? You may qualify for tax benefits like the Foreign Earned Income Exclusion or Foreign Tax Credit, which can lower your tax bill. But here’s the catch: to reap those benefits, you’ve got to file a tax return.

Automatic Extension Applies

Now, let’s talk deadlines. If you’re living abroad, you get an automatic extension to file your taxes, pushing the deadline to June 17, 2024. But here’s the kicker: that extension only applies to filing, not paying. So, if you owe Uncle Sam, be prepared to cough up some interest on any unpaid taxes come April.

Now, if you’re serving in the military overseas or your tax home and abode are outside the U.S. and Puerto Rico, you’re in luck – you qualify for that June deadline extension too. Just make sure to attach a statement to your tax return explaining your situation. More information is in the instructions for Form 1040 and Form 1040-SR, Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad, and Publication 519, U.S. Tax Guide for Aliens.

Extra Reporting

But wait, there’s more! If you’ve got foreign financial accounts or assets, you’ve got some extra reporting to do. Uncle Sam wants to know about all that dough stashed away in foreign banks or invested in overseas ventures. Schedule B and Form 8938 are your new best friends for reporting these assets, so don’t forget to fill them out.

Oh, and if you’ve got foreign financial accounts totaling over $10,000 at any point during the year, you’ve got to file FinCEN Form 114, aka the Report of Foreign Bank and Financial Accounts (FBAR). Missed the April 15 deadline? Don’t sweat it – you’ve got until October 15 to get that sorted.


Conclusion

So there you have it, folks. Living the expat life may be all about adventure and new experiences, but when it comes to taxes, Uncle Sam’s still knocking at your door. If you want help answering the call, consider reaching out to a Certified Tax Planner today – they know exactly what to do with your taxes no matter where in the world you are! Stay informed, stay on top of those deadlines, and keep those tax returns rolling in – no matter where in the world you call home.