One of the biggest problems I faced in my 16 years doing business in Kuwait was the lack of access to tax help. Now at least you can go online and find a few tax firms who specialize in expatriate tax situations including those with small businesses.
Even the IRS currently lists only 4 overseas offices on their site: England, France, Germany and China. So how can you get started?
Fortunately for me when I started overseasdigest.com one of the people who wrote for the website was a tax specialist who had written a book about expatriate taxes. She agreed to help me get things straight with the IRS which fortunately was fairly easy for her to do.
In fact the real fun didn’t start until I moved back to the United States. See if you can follow this logic.
When I decided to move back in 2008, I knew I would be moving before the tax deadline. So I decided to wait to file my taxes until I actually moved.
I canceled my post office box in Kuwait, set up a new post office box in Ohio, and used that address for my 2007 Federal return. A few months later I received a tax bill from the state of Ohio for 2007 taxes.
When I contacted them I said that I had lived in Kuwait for the entire year 2007. Their response was “then why is there an Ohio address on your Federal return?”
I tried to explain the situation and they said OK send us the state return that you filed. I told them I didn’t file a state return because I was living overseas and didn’t have a state since 1992.
Anyway it went back and forth like this and I had to get an attorney and a tax firm involved to finally resolve the situation.
If there’s a lesson from this it is to pay close attention to your taxes even when overseas and don’t hesitate to get professional tax help especially if you have a small business.
Expat Taxes in a Nutshell
Here are the basics of taxes for overseas Americans:
- You have to file a tax return even if you live outside the United States but you get until June 15th to do so.
- The rules, regulations and laws concerning expatriate taxes are changing faster than you can keep up with them unless you are an expatriate tax specialist.
- All the details after point 1 depend on where you are and your specific circumstances.
Therefore, I highly recommend that you seek professional tax help especially if you’re overseas and have your own business of any size.
That short summary is about as far as I’m prepared to go on this subject simply because expatriate financials and taxes are very complicated.
If you’re brave and want to try making sense of it, here are references to official IRS information but also a list of tax professionals who specialize in American expatriate taxes.
First the official IRS stuff
Internal Revenue Service resources you can refer to include:
- Small Business and Self-Employed Tax Center
- U.S. Citizens and Resident Aliens Abroad
- Self-Employment Tax for Businesses Abroad
- Publication 54 (2012), Tax Guide for U.S. Citizens and Resident Aliens Abroad
12 Professional Expatriate Tax Specialists and Firms
The company I still use for my tax work (including previous overseas tax related):
David B. Wills and Associates
Contact my tax specialist directly: Corey D. Wills at Corey@DBWills.com
(Tell him you read about him here)
When I lived in Kuwait, I used Jane Bruno of Bruno American Tax Services. She helped me out of some real problems that arose by trying to do my overseas taxes myself.
Part of her background includes advising taxpayers while working at the IRS Regional Office in Bonn, Germany.
Her site is: www.expattaxpreparation.com/index.html
Thanks again, Jane!
The following companies and tax professionals also specialize in American expatriate tax issues. I have never used any of these companies, but include them here for your convenience.
|Greenback Expat Tax Services||www.greenbacktaxservices.com|
|H&R Block – US Expat Tax Services||xpats.hrblock.com/|
|Koutoulas & Relis||www.AmericanTaxHelp.com|
|Online Tax Man||www.onlinetaxman.com|
|Overseas Tax Services||www.overseastaxservices.com/index.php|
|Taxes for Expats||www.taxesforexpats.com|
|Tax Planner CPA||www.taxplannercpa.com/|
Do you know other tax experts who deal with overseas Americans? Or perhaps you have an overseas tax story you’d like to share below? I’m sure everyone would appreciate it.