Are You Living Abroad and Haven’t Filed US Taxes?

4 min
Published on: 05-09-2022 Last modified on: 29-01-2024

If you are a U.S. expat living abroad and have not filed your taxes in the past, there are several options available to you to do so. It is important to remember that you are still responsible for filing your US tax even if you are living abroad. 

The following are some of the things Americans living abroad might encounter when they haven’t filed their US tax abroad

1. Tax credits

If you have foreign income that you have not declared on your U.S. taxes, you may be able to use foreign tax credits to reduce your U.S. tax liability. You may be able to claim foreign tax credits for income that you have paid to foreign governments, income that you have earned from foreign businesses, and other foreign income that has been taxed. 

2. FBAR’s

As an American expat, you are required to file a Report of Foreign Bank and Financial Accounts (FBAR) if you have foreign financial accounts totaling more than $10,000 at any time during the year. This includes accounts such as savings and checking accounts, brokerage accounts, and retirement accounts. 

If you fail to file an FBAR, you could be subject to civil and criminal penalties. The civil penalties can be up to $10,000 per year for each year you fail to file, and the criminal penalties can be even more severe, including up to five years in prison. Fortunately, there are a few steps you can take to make sure you comply with the FBAR requirements

First, be sure to keep track of all of your foreign financial accounts and their balances. You can use a spreadsheet or other software to help you with this. Next, make sure you file your FBAR on time. The deadline for filing is April 15th, but if you’re filing electronically, you have until October 15th.

3. Form 1040 and additional forms

If you are an American expat, you are required to file a US federal tax return using Form 1040 and any additional required forms. You will also need to file a tax return in your country of residence. 

As an American expat, you may be able to take advantage of certain tax benefits, such as the foreign-earned income exclusion and the foreign housing exclusion. You will need to file Form 2555 to claim these benefits.

4. File US tax abroad using PFICs if you have a company

PFIC is a Passive Foreign Investment Company. They are complex investments for US citizens. If an investment is a PFIC there are several complex rules, but generally, that investment earns most of its income through passive activities such as owning shares that throw off dividend income or royalty income. Income passive in nature is not an operating business.

A PFIC is simply a “pooled investment” registered outside the United States encompassing mutual funds, exchange-traded funds (EFTs), closed-end funds, hedge funds, insurance products, and non-U.S. pension plans. 

Having so-called PFICs results in punitive tax. FATCA makes it nearly impossible for the IRS to not tax them. Do you have PFICs? Or are you unsure? Be well-informed, and contact Americans Overseas for an affordable financial service adapted to your wishes, investment, and knowledge. Avoid this punitive tax.

5. Contact an affordable US tax preparation service

As an American expat, you are required to file a US tax return every year no matter where in the world you reside. This can be a complicated and time-consuming task, especially if you are not familiar with the U.S. tax system.

An international tax preparation service like Americans Overseas can help you file your US taxes using a variety of filing options, including e-file and direct deposit.

Americans Overseas helps U.S.expats file US taxes abroad

American Overseas offers expat tax services for American expats, US persons living and working abroad, and green cardholders.

International taxation is quite a complex and specialized area. Americans Overseas offers a large independent network of US tax accountants and financial planners, specialized for Americans living abroad. Avoid double taxation and choose affordable advice.

Americans Overseas refers to you free of any obligation and free of costs. Whether you’re employed or have a small business, we’ll make your life easier with a good, affordable tax advisor for your specific financial situation.


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Frequently asked questions

Understanding the US tax system, the obligations, and all the additional terms can be difficult. Especially if one lives outside of America. Is your question not answered? Contact us.

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