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What If You Live In Another Country? How To File Taxes
By Darrin Mish
You have to know that you are required to pay taxes by the US government if you're an American citizen living overseas. If you do not know how, you'll find that it's a rather simple process. To steer clear of IRS issues, filing is certainly a much better option. Many people think that they are exempted from paying and filing their taxes if they live in another country. Unfortunately, this is wrong. As an American citizen, you're required to file your tax returns, regardless of where you're working to avoid IRS problems. IRS Form 2555-EZ and the Foreign Earned Income form, or Form 2555, are two types of tax forms that citizens residing and working overseas are made to fill out. United States of America citizens or residents living in another nation are able to utilize either of these two forms. What applies are the same general rules. Simply file your tax return by April 15th of each year, and if you need more time, the IRS actually offers an automatic extension to American citizens who are residing abroad. You'll have more time to file the correct forms and pay the correct tax debts due with the automatic two-month extension. You must attach an official statement to confirm that you qualify for this two-month extension to be able to use it. A problem that faces people who've recently moved overseas is that they did not receive W-2 forms from their employers because they were sent to their old address; thereby, losing their tax information. It is your responsibility to get those documents. Regardless if that requires asking a good friend or family member to find your mail, or asking your company to send a new copy to your new address, it must be accomplished. Another option is to let your company send you electronic copies via email, while the official ones are being sent through regular physical mail systems. This will let you avoid an IRS issue and accomplish your tax returns on time. In situations where you are an American citizen residing in another country but your spouse isn't an American citizen, you do have a few options with regards to how you must file your tax return. Among those choices is to file as Married Filing Separately. This means that you, as a taxpayer, would just report your own income that you've earned for that year. However, you can qualify under the Head of Household status if you have children and provide more than half of each child's support. Finally, there's a third option where you can actually elect to declare your spouse as a resident alien. This would be done for tax reasons, so you would essentially be filing as Married Filing Jointly. There are many differences and subtle nuances when it comes to filing taxes while you're working and living overseas. To avoid an IRS problem, consulting a professional tax preparer is advised.
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This was an informative intel. Am I right in understanding this to mean that what you earn in another country will not be taxed back home, but you have to file your tax return anyway? I hope it doesn't mean that your income is taxed twice, once by the country you live in and once by the Federal government? I have been dreaming about moving to Italy one day and I certainly wouldn't want to pay taxes twice!
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