Even in those cases, though, using tax preparation software makes it easier to file your tax return and request direct deposit of your tax refund. After going through the tax software’s navigation tools, you will know whether you owe taxes or can expect a refund. You can choose to enter your banking details to pay taxes or receive a direct deposit to your bank account. Finally, you can opt to file electronically or choose to file a paper tax return. You have a few different tax return options when you’re married to a non-resident alien spouse and each option has major implications.

  1. You’ll get access to five of the most common tax forms expatriates need .
  2. Under “resourced by treaty” agreements, all of your income, including any money you made in the U.S., counts as income from the treaty country when figuring out the taxes you owe it.
  3. Many expats searching for a filing solution are actually filing for the first time.
  4. You can also mail a physical IRS Form 4868 and pay $1 worth of extension taxes if that’s preferred.

As an American taxpayer and filer living abroad, much needs to be considered – like essential software features that accommodate you, your tax case, and budget. TurboTax – millions of Americans who live in the States file with TurboTax, however it’s not a great option for expats because it doesn’t have all of the forms that expats often need. While it does have Forms 2555 and 1116, it doesn’t have Form 8833 for example, which is used for claiming tax treaty provisions, and neither does it offer FBAR filing.

You’ll need to provide detailed information about your foreign income, including the source, amount, and currency. On the other hand, if you’re a tourist, or an expatriate about to leave the country, you can apply to have the VAT removed or refunded. Refunds are allowed only on “significant” purchases, Wilson said.

I live in Kenya now and run my own online digital marketing business. Using this service has helped me save tons of time and energy on my taxes. I am also really relieved that they will help if I need it during us tax software for expats audits. It really makes living abroad and doing taxes a million times better. But relax, we live for this stuff, and your H&R Block Tax Advisor will know exactly what to do with your specific situation.

The more recent and popular trend is the online tax service that utilizes third-party contractors. These companies typically use a tax software that acts as an online information-gathering tool to gather your information, which is then handed over to a third-party preparer who prepares your tax return. It’s really important that you, an American abroad, find an expat tax software updated with the latest technology and includes all the tax forms you need to become tax compliant with the IRS. It is more complicated firstly because expats have to file additional forms to avoid double taxation. These often include Form 2555 to claim the Foreign Earned Income Exclusion and Foreign Housing Exclusion, or Form 1116 to claim the Foreign Tax Credit.

How To Calculate Employer Federal Withholding

If you don’t meet the criteria to use the TaxAct Free File Edition for free, you can still use the software as a non-qualifier for a fee of $64.95 per federal return and $44.95 per state return. Megan Hanna is an expert in commercial banking, accounting, credit repair, managing debt, and personal loans. Besides offering expat tax services from a tax advisor, individuals who prefer to do their own taxes can use the H&R Block Expat Tax Services software program to file their U.S. taxes online. This is particularly good for self-employed expats as the top plan includes Schedule C. Plus, for an additional fee, expatriates earning partnership, estate, or trust income can access Form K-1.

In the end, we’re a very affordable solution for expat tax filing – especially considering the tax forms and human expert tax support you’ll receive. It’s critical to understand 401(k) and IRA rules abroad and know exactly what forms fit your situation, because misreporting or filing the wrong expat tax forms may incur large penalties starting at $10,000. If you have either international retirement plans or investment accounts overseas, you should always use professional U.S. expat tax services so you don’t accidentally miss a form and end up owing more tax. Generally, if you need to file a tax return, you should use tax software. For example, you may not need software if you have one Form W-2 and no tax deductions.

The Best US Tax Software for Expats in 2024

Work with our expat tax experts and get the help you need navigating your unique situation. Americans living abroad qualify for claiming the Child Tax Credit. This means you can generally claim a credit worth up to $2,000 per child, though income limits apply. Expats who lived outside the U.S. for more than 6 months can only receive a maximum Child Tax Credit refund of $1,500 per child. Our software has been proven to be affordable and works for thousands of Americans abroad from all different tax situations. The proof is in the pudding with our customer reviews, and award-winning software.

Tax services for U.S. expats

If you are unsure if you have to pay state taxes while living abroad, we recommend consulting with an expat tax professional to ensure you stay compliant. People who itemize their deductions, earn gig or business income, or claim certain tax credits aren’t eligible to participate right now. Perhaps most importantly, tax software often receives real-time updates and alerts regarding changes in tax laws and regulations, including those related to foreign income reporting.

Even if the country you’re living in has a fiscal year-based tax system (like taxes for expats in the U.K. and Australia) U.S. taxes are still reported on a calendar-year basis. If you need an extension to get more time to gather information before the end of your resident country’s tax year, we can help you file Form 4868 to extend your deadline to October 15. All of the options on our list allow expatriates to file their taxes online. However, it’s important to determine how much support you’ll need and how complex your tax situation is before deciding to do it yourself.

The Foreign Bank Account Report is a form that you, as a US citizen abroad, must fill out if you have had over $10,000 total from all foreign financial accounts at any one time during the year. It is an informational form to fill out and extremely important. Last year, the IRS began developing a free tax filing service months after receiving an influx of $80 billion from the Inflation Reduction Act, which was signed into law by President Joe Biden.

How to file taxes as an American expat

To make this easier, the Internal Revenue Code offers certain foreign income tax credits, tax deductions, and income exclusions, potentially reducing your U.S. tax bill each year. Additionally, U.S. citizens and resident aliens living outside the United States are generally allowed the same deductions as citizens and residents living in the United States. The Foreign Tax Credit is a method American https://turbo-tax.org/ expats can generally use to offset foreign income taxes you’ve already paid abroad on a dollar-for-dollar basis. Tax software is a digital product that allows you to file both your federal and state tax returns with guided help. Depending on the tax software you choose, you can find features such as direct import of tax forms, tax deduction locators, expert tax help and customer service support.

You won’t be taxed on your foreign bank account because of this specific form. However, the fines for not filing this form can be up to $10,000. The Turbotax US software does NOT offer Form 8833 for Treaty Based Disclosures, which is critical for expats. Rather, TurboTax will tell you to download Form 8833 yourself, fill it out and attach it to your prepared tax return.