Things to Be Aware of On Taxes as an Expat
Taxes are the main source of revenue for many governments in the world including the US government. It is required of you, therefore, as a business or citizen of the US government to ensure that you pay your taxes and file your returns in time and also in the accurate amount. There are penalties for people who fail to follow the tax laws by evading the law, filing the returns late and so on. To be on the wrong side of the law is very dangerous and that is why it is important that you understand what is required of you. Many governments have taken the step of ensuring that there is essential info for you and such information can be gotten from an online homepage belonging to your government and therefore you will discover more about the tax laws.
Living in another country doesn’t mean that you are not responsible to your government when it comes to taxes. Being an expat can be a very challenging issue especially when it comes to the taxes because the process is complicated. If you are an expat, this article is a guide on taxes for expats.
There are myths and misconceptions about taxes for expats.One of the misconceptions that many people have when they move overseas is that the tax obligation should not be on them. This however is not the case because according to the American tax laws, you’re still obligated to pay the taxes to your mother nation. Also, it is believed that when you move overseas or work in another country, you are not expected to file your returns. Failure to file the returns is dangerous on your side because it can lead to double taxation. As an expat, it is also crucial to know that you are taxed both on your savings and also your income. Also, if you have more than $10,000 in your foreign financial account, you are expected to file the report with the FBAR which is the sum of the savings, investments, pension plan to name but a few.
There are many issues surrounding the issue of taxes and as an American citizen, therefore, there is the need to understand fully your obligations.For instance, you must understand that for you to use the foreign earned income exclusions, you have to satisfy the requirements that is either by the physical presence test or by Bona Fida Residence Test. It is important to note that you can fill an online tax return from abroad and use electronic money for payment.