All You Need to Know about Taxes for Expats
Taxes are the main source of revenue for many governments in the world including the US government. It is your responsibility as a business or citizen, therefore, to ensure that you pay your dues on time and also in the accurate amount that you required to pay.If you are found to be on the wrong side of the law, when it comes to paying taxes, such as tax evasion, resistant to pay, filing the returns late and so on, you are punishable by the law. If you don’t know what is required of you, you fall on the wrong side of the law which is not good and this can be avoided by equipping yourself with the appropriate knowledge about the tax law. 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. Living overseas as a US citizen is great but when it comes to the taxes, the process can be complicated and you need to learn more. As an expat, there are important things to be aware of as discussed below.
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. The American tax laws don’t have that opportunity for the citizens because when you’re living abroad, you still expecting to fulfill your tax obligations as a citizen. Many people also believe that because they live abroad they don’t have to file their returns. However, it is to your advantage to file the returns because you will avoid double taxation. As an expat, it is also crucial to know that you are taxed both on your savings and also your income. If your savings, investment, pension, mutual funds to name but a few adds up $10,000, then you are required to file a report with the FBAR.
With many issues surrounding taxes for people living abroad, it is important to understand all about taxes for expats. For example, if you want to use the foreign and income exclusion, it is important that you satisfy the requirements that are there for example, you can prove that by a physical presence test or Bona Fida residence test. Filing the return is not hard nowadays with online sites because you can file an online tax return from abroad and use the different electronic money for payment.