Tax time is extended for anyone living overseas for an extra two months. Finding help for filing an expat's taxes is easier with these tips.
The choice between a CPA, attorney or online software should be weighed and seriously considered. The tax laws for expats may be very complicated for most. Even the state tax laws are complicated. When searching for reliable sources, there may be many, but this article will deal with only a few to compare.
Turbo Tax Online Software Service for Expats
Of all the online software companies, Turbo Tax appears to be the best. They are the company that is sought out the most and the one with the best track record. There have been many articles written by William Perez (about.com) suggesting to use them and then there was an article written by David Gallagher (New York Times April 15, 2008) about his experience with the online community:
"As the filing deadline looms, the Live Community feature might actually generate some feelings of community among Turbo Tax users: Hey look, we’re all stuck here doing our taxes together! The question is, do you really want to be doing your taxes with — or getting tax advice from — people who CAN’T FIND THE CAPS LOCK KEY?"
The ultimate decision should be investigated thoroughly by the expats and their families as to which firm is the best.
Tax Me Less.com has Expat's Services
Tax me less.com is full of information for free and it is very good. The owner, Don D. Nelson, is both an attorney and CPA. They do give warnings about the possible penalties, but they give genuine information on how to avoid those penalties. Don Nelson is located in Dana Point, California, a point in their favor with showing a valid address, not just a web page.
James Maertin, CPA Handles Expatriates Tax Filings
James Maertin, CPA is located in New York City, New York. His website is located at www.jamesdance.com. His fees are based on general overseas clients and list his prices freely and openly. Although the prices may seem high, they seem to be in line with general fees charged. He has a master's degree in taxation and has been in the business for over twenty years.
Websites to Avoid
As sure as it will rain in Spain, there will be websites that act unethical. Look for a website that offers knowledgeable individuals who are either a CPA (certified public accountant) or an attorney. Things to avoid would be any website threatening possible lawsuits and fines from the US government as their main reason for helping. Scare tactics are a sure sign of weakness of the site itself. There are many companies that charge huge fees for expats, so make sure to shop around.
Expats are subject to fines for not filing their foreign bank accounts of $10,000 or more. If there is no income, the expat does not have to file a tax return, except if self employed and then the social security tax must be paid. There is no explanation needed if there was no income for the past 10 years and this year there is income.
State taxes need to be filed in certain states. In some states the tax does not need to be filed. Read this article on which states require an expat to pay taxes: Expats State Tax Filing Requirements.
Summary of Expat Tax Services
It is important to find a reputable company to do any tax preparation for Americans living overseas. The tax laws are very complicated and they should be handled by a professional. Some of the online software packages are sufficient for an expat who is knowledgeable in tax preparation. If there are any doubts in how to prepare the tax forms, it is better to hire a local professional.Photo courtesy of Photobucket:
