For most US expatriates living abroad, the thing furthest from our minds is US tax compliance. We are residents in a new home, with new friends and new possibilities. We’re fully absorbed in all things that are new – and it can be a formative and life changing experience.
When US expats think about their lives back in the States, it is often with a mixture of feelings. Some of us left to take advantage of or seek new opportunities. Some left to pursue a relationship. Others have a sense of adventure that cannot be sated until they ‘know’ – and only they will know when they’ve arrived at their destination.
And yet, during this personal and cultural – this life forming metamorphosis, there’s an element of Americana that remains with you and sorry, but will always remain with you – you must still file US income taxes. There. It is said. As a US citizen, you must still continue to file US tax returns.
Why is it that so many Americans living abroad are behind on their tax filing requirements? The reasons are varied and nuanced, but breaking it down and compiling all the various reasons into a few groups, it seems the answers fall into three main categories – ignorance, fear or rebellion.
What is the outcome for those American expatriates who either don’t know, procrastinate, or flat-out refuse to file their US income taxes? Eventually, nothing good. Ultimately, it all falls down. The reality is, one’s better off filing a return – any return that could just as well be written in Greek than not filing a return at all. Doing nothing is the worst thing because, sooner or later, the IRS will locate those who are non-compliant and assess them and open their lives to be read like a book – and it’s a story that can seem endless and quite painful.
This can all be alleviated though, and not with terrible difficulty. Just as the US now employs high tech methods for pinpointing non-compliant Americans abroad, there are any number of high tech resources available to get the help one needs. There are tax services online that specialize in US expatriate tax preparation and they’re expert at guiding you through the process of bringing yourself fully into compliance with the IRS. Whether for ignorance, fear or rebellion, the smart play is to get right with the US government and to do it soon. Choosing to make a bit of effort now, even if somewhat uncomfortable, will surely save a world of pain later.