Filing taxes in the US can be a complicated process when you live in the country, and when you’re living abroad, there are several more documents that you need to fill in, making the process longer still. Some people will opt to use a qualified tax preparer to help with the process because of this, and others will file their taxes themselves. Both are valid options, but if you need help with anything from filing taxes to business incorporation services, visit this page for more information.
What documents do you need?
You’ll need several vital documents when filing your taxes from outside of the US, starting with your W-2’s from your employer and any 1099-MISC/DIV/INTs. You have detailing income from being self-employed, from dividends, and interest throughout the year. It’s also useful to keep all your bank statements to ensure that nothing is missed. As someone living outside of the US, you’ll also need to pay income tax earned in any other country, so make sure to record all foreign bank accounts.
When filing your taxes abroad as a US citizen, you may be eligible for deductions, and to do so, you’ll have to prove that you qualify. To do this, keep a record of any income tax you pay abroad, housing expenses, mortgage interest paid, any property or school expenses paid for dependents, medical expenses, and all your expenses. A useful piece of software you can use to keep track of this is Expensify, which allows you to take pictures of receipts as they are received, or save them from emails.
What forms do you need to file, and when?
The forms you’re expected to file as a US citizen living abroad can be extensive and often change each year. As a good starting point, you’ll need to submit the following:
IRS Form 1040 – Your individual income tax, which is due on April 15
To this, you may need to attach:
Form 2555 – Foreign Earned Income form will exempt you from paying tax if you’ve lived outside of the US for long enough over the year.
Form 1116 – Tax credits for living abroad
Form 8938 – This is applicable for people with assets abroad, such as property worth over $200,000.
Can you apply for extensions?
As mentioned, the deadline for all US taxes is April 15, but you can automatically take advantage of two types of extensions if you live abroad. The first is a two-month extension, taking your deadline to June 15. To qualify for this, you need to attach a statement to your tax return that you’re not living in the US, and that your principal place of work isn’t in the US.
There’s an additional extension that gives you an extra six months to file your taxes. You’ll need to fill in form 4868 before June 15 to let the IRS know your situation. By filling this in, your final deadline for filing your taxes will be pushed to October 15.