Having unfiled tax returns is certainly nothing to brag about. But it is a very common problem. Expats should not worry about the late filings as much as U.S. residents should.
The main reason this is the case is because many expats will owe less amounts to the IRS than their counterparts in the U.S. Penalties and interest are only assessed if there is a tax liability for a given year. If there is no tax liability then there are no penalties and interest. These are the amounts that can give expats grief.
Expats typically owe less in tax for the following reasons:
- Many expats are retired. As such, they typically have lower income along with social security (which is only partially taxable).
- If an expat is earning income then up to $99,200 (for tax year 2014) of that foreign earned income can typically be excluded from taxation in the U.S.
- For any income taxes that an expat pays in the residence country they can receive a tax credit on their U.S. tax return. This will help avoid double taxation.
Although unfiled FBARs can often be more challenging, it may not be as bad as you think. Even if you owe for the old years there are so many options available to help you resolve your tax debt. Because the IRS has the goal of collecting every possible tax dollar, they will often work with you to resolve the debt. You may be able to set up a structured payment plan that allows you to resolve the debt over time by making a monthly payment that you can afford. In some cases, you may be able to negotiate the amount that is owed and offer a lump sum payment to settle the tax debt. There are numerous other options that could be available to you.
Unfiled Tax Returns
Stop Procrastinating and Get Them Filed…
Unfortunately, none of these options can work for you until you get the unfiled tax returns filed. There is no way to know what amount you owe and you will not be able to enter any negotiation until the returns are completed and filed. If you do not know where to begin to get your taxes filed, seek professional help from an accountant, lawyer, or other tax professional that specializes in preparing back taxes. These individuals are experts in tax laws and will help you through the process of gathering the information that you need to complete and then file your old tax returns. Every day that you delay filing your return simply adds more to your obligation. Do not wait, get help and file the return.
Help With Unfiled Tax Returns is Here…
Filing old tax returns is not as easy as you think. You may have questions regarding penalties, interest or even obtaining copies of your W2s, 1099s, etc. Well we are here to help. We have extensive experience filing old returns and we know how to deal with the IRS.