OneWorldHerald.com

IRS Streamlined Procedure is Helping US Expats to File their Taxes

Earlier, US Expats did not have to worry about filing taxes. The US Government did not track their income of its assets to other countries. They did not have to look over their shoulder and file for the taxes. However, now every US Expat needs to file for taxes.

This started during the civil war when the US Federal was desperate for the revenue. That’s why many fled to Canada to escape the taxes. However, the rule remained dormant till 2008, till the digital age came in. Then the government had a way of tracking its citizens.

US Expats were in a dilemma then about how to file for taxes. Because many had taxes going back years, they wanted to avoid double taxation. The IRS came to their rescue with the Streamlined Filing Procedure that helped Expats.

Filing for taxes is more difficult outside the US than inside. First of all, Expats must report their worldwide income. They must report it accurately according to the current rates.

Moreover, US Expats have to worry about double taxation. But they can deal with it with the help of policies like Foreign tax credit and Foreign Earned Income Exclusion. It allows the expats to claim US tax credits up to the value of foreign taxes that they’ve paid.

Expats who don’t file foreign taxes, such as Digital Nomads or expats who live in countries with no income tax are eligible for exclusion.

Other than the exclusion, Expats have to report their foreign bank and investment accounts by filing a Foreign Bank Account Report or their foreign financial assets on Form 8938. Because of these complications faced by Expats, they can register for an extension.  They can get an extension until June 15th, and more until October 15th online if they desperately need it.

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