There are 2 certain things in life we all have to deal with: death and taxes! Nobody enjoys having to pay or file their taxes. If you can't understand how to do your taxes, there are affordable ways to do it so that you don't end up on Uncle Sam's naughty list.
As you may know, I've traveled and lived in many different countries and I've had to figure all of this out on my own. Unfortunately, the USA education system isn't built to teach us about all the real life scenarios we´ll encounter in this real world yet. Below you will find some tips and tricks I've used to keep my tax fees free/minimal, quick and easy!
*Disclaimer* Before I begin, I want to remind you that I'm not a tax advisor, tax consultant or any kind of tax professional. I'm an average person that has to file taxes just like you do and I've learned how to do it for my situation. Seek professional tax advice if you need more information and assistance!
Luckily, Turbo Tax has tax advisors ready to help you!
I've been using Turbo Tax for years! The reason why is because it has been free and easy for me to file my taxes online. When I first started my working career in my early 20's, it was free to file and submit. You can still file freely with the Free Edition if you have a simple tax situation (Ex: W-2, 1099-INT, 1099-DIV, etc.). For more detailed and complex tax situations, you will need to pay a small fee to file (Ex. Home ownership, children and dependents, business ownership, investments, etc.).
Now, I use the paid version because I need to file and report my foreign earned income (Form 2555). I also need to file the FBAR as well because I have foreign bank accounts in the countries I've lived in. YOU ALWAYS NEED TO FILE YOUR TAXES TO USA WHILE LIVING ABROAD! You may not owe taxes in USA but there still needs to be a paper trail of your income that the USA government has. It sucks, I know. You have to do it if you want to avoid any kind of audits! When I first started living abroad, it only cost me $45 to file from abroad using Turbo Tax. The fees were lower back then. After I printed out the form and sent my taxes to the IRS, I learned what I needed to write and print for the next year. The following year, I did my taxes by myself without Turbo Tax. I printed a new form and filled in the same information in the same spaces and filed my taxes via snail mail. It cost me $4! When your financial situation doesn't change, it's REALLY CHEAP to file your taxes yourself!
I really like TurboTax because they have added more tax situations to their categories to make it as easy as point-and-click and the information is completed for you. They also offer free assistance as you go through the steps (which I used when I first started).
There are other tax software options that others have used that are similar to Turbo Tax. Some people use H&R Block. I don't have experience with them but I've heard good reviews.
You can always, of course, file freely on the IRS Website as well.
When I lived in Germany, I used WunderTax to file my taxes when I was working with a company. WunderTax was the equivalent of TurboTax in my opinion and it was in English. However, Wundertax didn't have all the services necessary to help freelancers. This may change in the future though. If you are a freelancer or self-employed, you will have to file on website ELSTER to the German IRS (BZSt - Bundeszentralamt für Steuern). It's all in German but it's free. When I filed my freelancer tax return with Wundertax, they gave me my tax return. I took my tax return information and just clicked through the information on the ELSTER website. It took about 2 hours for me to input all the information but it became easier after I got the hang of it. If doing taxes in German overwhelms you, get a friend to help!! I was alone and did it myself. Thankfully my German was decent enough to get through it.
In South Korea, I was tax exempt for 2 years and didn't need to worry about taxes in South Korea until my 3rd year living there. It's a system they have in place for English Teachers that work with the Korean Government. USA and South Korea have a tax agreement that allowed this (Tax Residency Certificate info here). Once I exceeded my 2 years, I wasn't actually told how to file my taxes. My job actually set up my taxes for me when I started working there. After a year, I just received a letter in the mail telling me how much I owed and where/how I could pay it. It was simple to make the payment and not a lot of tax (~$200 for the year). It was the easiest tax experience I've ever had abroad.
I'm currently doing research on Taxes For Expats to help with doing Taxes in the western European Countries (Ex: Spain, Portugal, Italy, France). I will share more tax information from different countries I've lived in after I figure it out! 😅
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