Taxes for Expats: A Review

As a US citizen, I have the honor and privilege of filing for US taxes no matter where I live or how long I’ve been away from the US. Isn’t that nice? Also, as a resident and self-employed worker in Czech Republic, I pay Czech taxes. I pay the Czech government both on my income and into social security (as well as health insurance), so I was very worried that I would have to pay US taxes as well. Double taxation did not sound fun. I read a lot of information online that led to me being very confused and very stressed out because I got a lot of contradictory information about who might have to pay, and who might not.

Last year, I filed using a free service whose name I’ve honestly already forgotten – one of the computer programs where you input the info, and it spits out your return. Because I live overseas and I earned hardly any money last year, it worked fine and I didn’t owe the IRS anything. But 2017 was different for me – in 2017 I earned a lot more (yay!), and I had a new job (yay!) that registered me as “Self Employed” with the IRS back home (…yay?) and boy, that changed things. I attempted to go through the same process as I had last year, but this time the computer program calculated that I owed $2700. $2700. $2700?! That’s a lot of money for someone who considers it splurging to buy the 70kč frozen pizza instead of the 39kč pizza. I did not think I should owe such a huge amount when I already pay Czech taxes, so I didn’t file then (thank god).

After that, I did a bunch of reading and research on my own, some on the IRS website itself, some on blogs, some on facebook groups. The IRS articles about totalization agreements seemed basic enough – they are in place to prevent double taxation. I should not have to pay taxes in two countries. Right? But every time I tried to tackle the self-employed section of the tax return, I was less and less sure and my anxiety began to grow. Reading messages in facebook groups was the opposite of helpful because everyone is confident they’ve got it figured out, and there always seem to be two very confident people with completely opposite, contradictory information. My anxiety began to take root and it got to the point where anytime any one would mention taxes I felt a twist in my guts and a visceral repulsion as the ghostly image of $2700 floated across my mind.

Fortunately for me… tax professionals exist! Brave, foolhardy souls who go into the dragon’s den day after day and emerge unscathed, save for remnants of red tape and ink on their fingertips. Or so I presume. I can say for sure that they can answer all your questions and do most of the terrible tedious paperwork for you. Yes, you still have to fill out a bit of paperwork, and you have to pay them. But good news – it’s a lot less than $2700!

Review of Taxes for Expats – online tax preparation professionals serving US citizens living abroad

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A summary:

What: US tax prep service for expats

Who: IRS authorized Enrolled Agents based in the US specializing in US expat taxes

When: Whenever, but expat returns are due June 15th. You can file an extension to October 15 (see bottom of page)

Where: Anywhere in the world! (with internet)

Why: Because filing taxes is a nightmare

How much: $350 for federal return (of income under $100k/year, $450 for over$100k/year)
$100 for state returns
**Save $25 if you sign up with this link here

My Experience: Overall – positive!

I entered the process pretty stressed out and anxious, but I left feeling satisfied everything was taken care of, and relieved to have had help in the process. That said, I had few hiccups navigating the website, as I think it is not as streamlined as it could be. I did manage to do everything I needed, but there were several times where I found myself unsure of what I should be doing next and where – Taxes for Expats is great in that they have tons and tons of information available to their customers in their articles and FAQ, but the downside is it can be hard to find the particular bit of information you are looking for in the deluge. The questionnaire is simple in its format, but US tax law is so complicated it can still be hard to tell if you’re doing it right.

I’ve outlined the steps you’ll need to take when you file with Taxes for Expats, so you can how the process operates for yourself: Review Part II: The Process

Luckily, the Enrolled Agent part of the process went very well. Enrolled Agents are certified by the IRS to handle tax preparation – see here for more information. I was assigned a polite, professional agent named Lynn and she answered all of my questions, asked for clarification when needed, and finished my return and then a revision of my return all in a timely manner. So for me, Lynn was really the part worth paying for. Everything else was preamble.

If you are self-employed abroad, or a VIPkid or online teacher like I am, I’ve also written up more of the dirty details on how the filing process went for me as a VIPkid teacher and expat: Review Part III: The Self-Employed/VIPkid Angle

Afterwards I stumbled into their Articles sections and may come back here again next year at tax time – so much information is here! Definitely check it out if you have questions, along with their FAQ (it’s very detailed).

Will I use their service again? Yes. $350 is a lot of money to me, but since I know about it a year in advance I can put a little aside every few months and it won’t break the bank. Knowing how to deal with this for the future will be a load off my mind. In the end, my tax return was 22 pages long, and thats 21 more than I’m prepared to deal with on my own. So yeah, I will be coming back next year.

***

For the Expat Panicking Over Taxes – You have until June 15th!

For those that live overseas, you have until June 15th to file. If you don’t think that you can get everything sorted by then, you can file an extension and then you will have until October 15th. Taxes for Expats offers to file that extension for you for free, if you put down a $50 retainer towards their tax preparation service fee. The link to file for an extension is found in their Client Home Page – they make it pretty big and hard to miss!

If you don’t want tax preparation service with Taxes for Expats, no need to pay $50 – you can file for an extension for free here.

Everyone: You can save $25, credited against your total fee with Taxes for Expats if you sign up with my referral link right here.

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