The 2023 US tax season officially opens on January 23, 2023. Are you ready? Follow these 8 steps to keep yourself organized and save time & money.
1) Organize your tax documents and paperwork: Most of your tax documents will arrive by the end of January or mid-February. If you are missing a document, be sure to proactively reach out and locate it.
2) Download Documents: As you organize, remember that most of your tax documents will arrive electronically. It may arrive via email, as a reminder via email that you have tax documents available to download, or you may need to log into your financial accounts to download annual statements.
3) Know the Dates: The IRS opens its filing season on January 23, 2023, but as a US citizen abroad, you have until June 15, 2023, to file your US tax return. If you are living in Switzerland, check with your canton, most Swiss tax filings are due by March 31, 2023. Remember, if you have a foreign bank account, you will likely need to file the Foreign Bank Account Report (FBAR); this form has the same deadline as your US tax filing..
4) Understand Your Filing Status: The IRS has 5 main filing statuses:
• Head of Household
• Married filing jointly
• Married filing separately
• Qualifying widow/widower with dependent child
As a US citizen living abroad, you have some planning considerations around your filing status. You can file Married filing jointly if your spouse is willing to report their worldwide income to the US, you can file Married filing separately, or if you have dependent children, you can file as Head of Household.
5) Make Sure Your Name & Address Are Correct: If you’ve recently moved abroad, be sure to update your address. If the IRS needs to send you any correspondence, they will use the address they have on file.
6) What documents do I need? Review your previous return for clues to the documents you used in the past. Common documents include:
• Personal & family identification (including Social Security numbers)
• Annual Salary Statements (W-2, Lohnausweis, etc)
• Financial Statements showing any income (interest, dividends, capital gains/loss)
• Retirement Account Statements (Pension statements, Traditional/Roth IRA contributions)
• Crypto/virtual Currency – if you swapped one coin for another or if you transferred to fiat, you are required to report these transactions whether or not you receive form 1099-K.
• Potential Deductions: Mortgage interest payments, charitable giving, health insurance and medical expenses, etc
• Rental Property Information (income, expenses, improvements & depreciation)
• Business Information (income, expenses, improvements & depreciation)
• Travel calendar: this is especially important if you split your time between the US and other countries
• Remember, as a US taxpayer abroad, your tax documents will look different than the standard US tax forms. You may not even receive a formal tax document for a non-US investment, so take the time to consider all income sources and ask your financial planner or tax preparer if you aren’t sure if something should be reported.
• If you had a life-changing event such as a move, job change, divorce, marriage or birth, be sure to update your tax and financial advisor.
7) Review last-minute tax savings opportunities: Even though the 2022 tax year has ended, there are a few tax-saving opportunities that allow you to save on your previous tax return. Be sure to review Traditional IRA deductions and potentially a SEP IRA contribution (if you are self-employed)
8) Consider an extension. As a US citizen outside of the US you have until June 15th to file your tax return, but there are also extensions available through October 15th and December 15th. Remember, an extension is to file, not to pay, so make the appropriate estimated tax payments.
You are unique, and so is your tax and financial situation. Rules of thumb or general information may not apply to your situation, so be sure to speak with someone who understands the complexities and challenges of being an expat.
Meet the Authors:
Nicole Green operates NGG Tax Group. She holds a master’s degree in Taxation and has over two decades of tax experience. She provides compliance, tax, virtual currency consulting and audit representation to taxpayers and other Advisory Firms. She specializes in supporting US and foreign nationals on a wide range of cross-border transactions to help unravel the complexity of the US tax system.
Arielle Tucker is a Certified Financial Planner™ and IRS Enrolled Agent with Connected Financial Planning. She’s spent over a decade working with US expats on US tax and financial planning issues. She is passionate about working with US expats and their families to help secure their financial future reflective of their core values. Arielle grew up in New York and has lived throughout the US, Germany, and Switzerland.