An Expat Tax Advisor is a tax professional who specializes in helping U.S. citizens living abroad manage their tax obligations. They assist with filing U.S. tax returns, claiming the Foreign Earned Income Exclusion, and avoiding double taxation through the Foreign Tax Credit. They also ensure compliance with foreign bank account reporting and help apply tax treaty benefits.
Key Services
- U.S. Tax Return Preparation: Filing federal and state tax returns.
- Foreign Earned Income Exclusion: Excluding up to a specific limit of foreign income from U.S. taxes.
- Foreign Tax Credit: Avoiding double taxation by claiming credits for foreign taxes paid.
- FBAR Filing: Reporting foreign bank accounts if total assets exceed $10,000.
- FATCA Reporting: Filing Form 8938 for foreign financial assets.
- Tax Treaty Guidance: Utilizing treaties to minimize tax liability.
- Streamlined Filing Compliance: Assisting expats who are behind on their tax returns.
Benefits of Hiring an Expat Tax Advisor
- Compliance: Ensures full compliance with U.S. tax laws and reporting requirements.
- Tax Savings: Maximizes credits and exclusions to reduce your tax bill.
- Peace of Mind: Avoids penalties and reduces the risk of audit or fines.
Foreign Earned Income Exclusion vs. Foreign Tax Credit
| Category | Foreign Earned Income Exclusion (FEIE) | Foreign Tax Credit (FTC) |
| Purpose | Excludes up to $120,000 (2023) of foreign earned income from U.S. taxes. | Provides credit for taxes paid to foreign governments to avoid double taxation. |
| Eligibility | Must meet bona fide residence or physical presence tests. | Must pay or accrue foreign taxes on foreign income. |
| Maximum Benefit | Up to $120,000 of foreign earned income excluded. | No limit; based on foreign taxes paid. |
| Forms Required | IRS Form 2555 | IRS Form 1116 |
Frequently Asked Questions (FAQs)
1. Do I need to file U.S. taxes if I live abroad?
Yes, U.S. citizens and residents must report worldwide income, regardless of where they reside.
2. What is the Foreign Earned Income Exclusion (FEIE)?
FEIE allows expats to exclude up to a specific limit of foreign income from U.S. taxes. In 2023, this amount was up to $120,000.
3. What is FBAR?
FBAR stands for Foreign Bank Account Reporting. If the total value of your foreign accounts exceeds $10,000 at any point in the tax year, you must file an FBAR.
If you’re a U.S. citizen living abroad and need assistance navigating your tax obligations, don’t hesitate to reach out to our team of expert Expat Tax Advisors. We’re here to help you understand your options, maximize your tax benefits, and ensure full compliance with U.S. tax laws. Contact us today for personalized guidance tailored to your unique situation.
