Tax payers can officially file their returns starting on Monday, January 27, when the IRS will begin accepting and processing 2019 tax year returns. There were no changes to filing and paying any tax due deadline, which remains Wednesday, April 15.
The IRS reported that more than 150 million individual tax returns are expected to be filed for the 2019 year, and recommends taxpayers to plan ahead and prepare their returns in advance. Furthermore, The IRS encourages filing electronically and choosing direct deposit.
Whether you’ve become a globetrotter recently through a work move…you’re a self-employed digital nomad…you’re a long-established expat having lived overseas for a number of years and perhaps enjoying retirement….or even if you’re an ‘accidental American’ who moved abroad as a child but retained American citizenship…you’re STILL obliged to pay U.S. taxes.
Let’s face it, “File my taxes!” is not the typical rallying call to a great day as you sip your freshly brewed coffee in the morning.
The key is to be aware of your options and make sure everything is filed correctly. An overwhelming majority of US expats don’t have tax owing when they use Streamlined Procedures, which is an IRS amnesty program available to taxpayers who failed to report foreign financial assets and failed to pay all tax owed. Learn more here.
When you factor in options such as the Foreign Earned Income Exclusion, or the Foreign Tax Credit, the amount you owe can end up being less than you fear. There are pros and cons to weigh up for each (of course, this is something our team helps our clients sort through). For example, the FEIE disqualifies you from claiming the Additional Child Tax Credit but can reduce your due amount to zero in some instances.
The key is to be aware of your options and make sure everything is filed correctly.