Here’s How the US Expat Tax Can Affect You
Does the Government Know what I am Doing?
Living outside of the United States does not guarentee that the IRS will not have knowledge of your income. In 2015, the Mexican and United States government shared large amounts of information regarding the financial status of the American citizens living abroad. This is part of an agreement between America and numerous countries on reporting the income of their residents. Nobody enjoys paying taxes. This has been a fact since taxes were introduced into America. However, avoiding taxes can be much worse than loss of income from paying them. It has been calculated that over one million American citizens cheat on their taxes each year. Over five million is paid by the IRS annually to citizens who turn these people in. While these numbers are staggering, it is even more surprising that only approximately 1% of citizens are audited each year. Whether the US Expat tax is appreciated or not, it is a tax that must be adhered too. The difference between it making or breaking you is knowing the tax laws and how to file properly.
What if I do Not File?
Failure to file your US Expat Tax can range from moderate to severe repercussions. With jail time being one of the most severe forms of punishment, most tend to see more moderate actions for this crime. Failure to file your US Expat Tax can range from fines and property liens to employer wage garnishees. Others have seen compounding penalties accrue until a payment is made. In more dire situations, the IRS may file your taxes on your behalf. While this may sound like a simple solution, keep in mind that these taxes will not include any deductions or credits that you may have had if you had filed them yourself.
Who Needs to Pay?
In a nutshell, if you live outside of the United States and have an income, you will need to pay the US Expat Tax. There are some excl