If you have been living abroad and did not know that you needed to still file your US Taxes while you were living outside of the US. You might be feeling panicked about how to catch up. This can rightly be a reason to feel worried, but there is a process that you can follow since this situation isn’t uncommon. The number of years of back taxes that you owe and the amount of money that is due will impact your amnesty options if you are eligible for one.
You need to make sure that you are aware of your options for your missed US tax filings before you reach out to the IRS.
You Have Missed 1-2 Years of Tax Filing
File your back taxes if you have only missed 1-2 years. This is called back-filing and is normally allowed for your situation. This is not usually a difficult process, but you should seek the help of an accountant for this process.
Is There an Amnesty Procedure For Longer Missed Filing?
If you haven’t filed for three years or more, there is an amnesty program that you can often qualify for. It is called the Streamlined Procedure, and it is for Americans living abroad who have missed tax filing and foreign bank account reporting longer term.
To qualify for the amnesty program, you will need to file your last 3 missed tax returns. And you will have to file your last 6 FBARs. You will pay any tax and interest due as well. Although most expats can claim exemptions and credits for Americans abroad and so don’t owe any tax once they file. Lastly, you will need to self-certify that your previous non-compliance was not willful.
Once you have done this process, the IRS will consider you caught up and compliant. You should also consider working with a skilled expat tax accountant for this process. There are many forms that need to be completed when filing from abroad. And you do not want to have to pay taxes that are not needed.
This amnesty process is meant to help you get help with your back taxes. And your accountant might be able to help you to get a payment plan in place that will take care of your repayment needs fairly.
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Working With a Skilled Tax Professional Can Help
A skilled tax professional can help you to make sure that your US taxes are filed correctly from abroad and that you are not paying tax that you needn’t. You will have to pay taxes every year, but there are some exemptions that you might qualify for. Working with a skilled tax professional can help you to file properly. And pay the right amount of federal tax as an expat each year.
If you have fallen behind on your taxes, don’t panic! Get some help with your filings and look into the amnesty program to see if it can help you with your tax filing needs.
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