Things to Be Aware of On Taxes as an Expat
The government requires resources to run the state and for many governments, the main source of revenue is the taxes they levy from people and businesses.As a citizen or a business, therefore, you have an obligation to ensure that you file your returns in time and in the proper amount. There are penalties for people who fail to follow the tax laws by evading the law, filing the returns late and so on.It is upon you, therefore, to understand the tax system for your country, avoid getting on the wrong side of the tax laws. Many governments have adapted to the new technology by having an online page where the citizens can learn more about the tax laws and what is required of them, such info can help you discover more of what is required of when it comes to taxes.
Living in another country doesn’t mean that you are not responsible to your government when it comes to taxes. Being an expat can be a very challenging issue especially when it comes to the taxes because the process is complicated. As an expat, there are important things to be aware of as discussed below.
There are myths and misconceptions about taxes for expats.One of the misconceptions that many people have when they move overseas is that the tax obligation should not be on them. The American tax laws don’t have that opportunity for the citizens because when you’re living abroad, you still expecting to fulfill your tax obligations as a citizen. Many people also believe that because they live abroad they don’t have to file their returns. However, it is to your advantage to file the returns because you will avoid double taxation. The US government will also tax you on your savings and also your income. If your savings, investment, pension, mutual funds to name but a few adds up $10,000, then you are required to file a report with the FBAR.
There are many issues surrounding the issue of taxes and as an American citizen, therefore, there is the need to understand fully your obligations.For instance, you must understand that for you to use the foreign earned income exclusions, you have to satisfy the requirements that is either by the physical presence test or by Bona Fida Residence Test. You can fill an online tax return from abroad and you are allowed to make payment using different forms using electronic money such as credit and debit card.