What If You Work In Another Country? How To File Taxes
You may not be aware of how to file your taxes if you’re an American citizen working and living abroad. You may not even realize that the US government and the IRS actually require that you file your taxes, even if you’re outside of the country. Although it is a different method, it’s definitely a better choice than not filing at all because it is relatively simple and you can steer clear of bigger IRS issues.
Many people believe that they’re spared from paying and filing their taxes if they live in another country. This isn’t true, unfortunately. No matter where you’re working, you’re obliged to file your tax returns as an American citizen to avoid IRS problems.
When living in a foreign country, citizens and residents of the United States of America can use two types of tax forms. These forms are the Foreign Earned Income (Form 2555) and Form 2555-EZ.
What applies are similar general rules. Your tax return needs to be filed at the 15th of April each year, and an automatic extension is offered if you require more time. As a matter of fact, you will be granted an automatic 2-month extension, providing you more time to pay the correct tax debts due and file the right forms. However, if you want to utilize the 2-month extension, you need to actually attach an official statement explaining and confirming that you essentially qualify for the extension.
Among the issues that many people who have recently relocated to another country is that they didn’t bring all of their tax information with them, or they relocated before they could get all of their W-2 forms from their employers and they were actually sent to the old address in the United States. It’s your responsibility to obtain those documents. It must be accomplished, whether that takes having your company to send a new copy or getting a good friend to track down your mail. Another option is getting the official copies sent via the regular mail while electronic copies are sent to you via email. This will allow you to complete your tax returns in a timely manner and avoid an IRS problem.
If your spouse isn’t an American citizen, there are several options to choose from when filing your taxes. You can choose to file as Married Filing Separately wherein you only must report your own income for the year. You can file as Head of Household if you have children. You can also file as Married Filing Jointly by identifying your spouse as a resident alien.
There are numerous differences and slight nuances when it comes to filing taxes while you are working and living in another country. To prevent an IRS problem, consulting a professional tax preparer is advised.
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