Taxes can be overwhelming to anyone. But, when you’re an expatriate living abroad, they can be really complicated. These are times when it pays to have an international tax law specialist. As a U.S. expatriate residing abroad, you have a legal obligation to file U.S. tax returns each year on your worldwide income. An international tax law specialist can help you with these filings, ensuring you receive all the deductions to which you are entitled, but also to help you stay within US tax laws while living abroad.
There are some tax exemptions due for expatriates living abroad that an international tax law specialist can help you sort out. For example, if you are a full time resident abroad for a full calendar year, or live there for 330 days out of any consecutive 12 month period, you can exclude up to $80,000 of earned income from US taxation for years 2003 and beyond. If you’re married, you can also exclude up to another $80,000 of your spouse’s income if you file jointly. Rental income, interest income and dividends you receive are not subject to exclusions; only income you receive from working counts. However, you must file a tax return each year to get these exclusions.
In addition, an international tax law specialist can help you sort through other deductions that you may be able to take because you’re living abroad, such as deductions for foreign housing expenses. There are restrictions on this deduction, as it only comes into play if your spending on foreign housing exceeds a standard amount.
Your international tax law specialist can also help you sort out any foreign tax credits for which you may be eligible. In some cases, you can claim deductions from your US taxes for taxes you’ve paid abroad. However, in other cases, these foreign taxes are not deductible on your US taxes.
Finally, the United States has tax treaties with over 60 other countries pertaining to income tax filing in one country while living in another. These tax treaties can be very beneficial to the expatriate living abroad, but they can be quite complex to sort out. Your international tax law specialist has a working knowledge of these treaties and is trained to help clients get all the tax benefits to which they’re due.
If you’re a US citizen living abroad, it really is wise to hire an international tax law specialist to help you sort through all of your tax issues. They can help ease the tremendous burden of filing US taxes while living abroad, help you get all the deductions you deserve and help you stay within the law.