checking how much tax you owe from outside the US

[sharky 2]

Hey everyone,

 

I hope this is the correct place to post a question like this. I've done an extensive Google search and haven't had a huge amount of luck on this. I only found out recently that if you're a US citizen living abroad, you still have to file tax returns. I have been living in NZ full-time since Feb 2021, so I imagine I will have some outstanding tax debt to pay if I decide to return to the US to live.

 

My main question is.... is there any place I can find out how much tax I actually owe? I'm not going to pay the huge number of private companies $$$$ just so they can overcharge me. Surely I should be able to have some IRS portal where you put in your SS and it generates this information? Or is it a case of filing a late tax return from abroad and then seeing what comes up?

 

Hope someone can help

 

cheers

[EatBulaga 462]

37 minutes ago, sharky said:

Hey everyone,

 

I hope this is the correct place to post a question like this. I've done an extensive Google search and haven't had a huge amount of luck on this. I only found out recently that if you're a US citizen living abroad, you still have to file tax returns. I have been living in NZ full-time since Feb 2021, so I imagine I will have some outstanding tax debt to pay if I decide to return to the US to live.

 

My main question is.... is there any place I can find out how much tax I actually owe? I'm not going to pay the huge number of private companies $$$$ just so they can overcharge me. Surely I should be able to have some IRS portal where you put in your SS and it generates this information? Or is it a case of filing a late tax return from abroad and then seeing what comes up?

 

Hope someone can help

 

cheers

 

You have to backfile your annual tax returns for 2021-2024, to find out how much you owe.

https://www.irs.gov/individuals/international-taxpayers/us-citizens-and-residents-abroad-filing-requirements

 

Most people fall under the foreign income exclusion limit so they don't owe anything. 

https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion

 

Also if you have foreign bank accounts that hold over 10K US total equivalent at anytime during the year, then you also need to file the FBAR.

https://www.fincen.gov/report-foreign-bank-and-financial-accounts

The consequences for not filing the FBAR if your total balance is above 10K are that your foreign accounts can be frozen by the US government. 

 

If your foreign incomes were below the exclusion limit, then I'd go ahead and backfile DIY. If your foreign incomes were above the exclusion limit or if you have exceptional circumstances, then I'd get a professional ASAP to backfile to see how much you owe and pay before the penalties get overwhelming. 

 

Edited Wednesday at 10:05 AM by EatBulaga

[Crazy Cat 43,677]

3 hours ago, sharky said:

Surely I should be able to have some IRS portal where you put in your SS and it generates this information?

Nope.  You have to file your taxes to find out.  I recommend hiring a knowledgeable tax pro who knows tax treaties, foreign income exclusion rules, and FBAR requirements.  Having a foreign spouse who has reportable foreign income, foreign bank accounts and assets, I can testify that it can get complicated.  That's why I choose to pay our CPA to do all the research and filing.....every year.  Too many different forms required for me to DIY. 

 

Fun Fact:  The FBAR is filed with the Department of Treasury, not the IRS. There are stiff fines for not filing if required.  I have peace of mind letting the CPA handle it.

Edited Wednesday at 12:46 PM by Crazy Cat

[Vickys_Mom 252]

You'd want to look at IRS Publication 17.  This is the old-style way of computing taxes.  You have the paper tables and you have to do the math...you basically have to do the forms as if you were going to file them.  If you need old versions, search the internet for something like "2021 IRS Publication 17".  

 

You can go to irs.gov and look at the Tax Withholding Estimator.  I don't think it adjusts for different tax years (it's supposed to help you fill out your current one), but it'll give you a number at least.

 

I'm also going to vote for getting a professional involved.  If you do it once and get caught up it'll be easier to do in the future.

 

Regards,

Vicky's Mom

[WeekendPizzaiolo 61]

9 hours ago, sharky said:

Hey everyone,

 

I hope this is the correct place to post a question like this. I've done an extensive Google search and haven't had a huge amount of luck on this. I only found out recently that if you're a US citizen living abroad, you still have to file tax returns. I have been living in NZ full-time since Feb 2021, so I imagine I will have some outstanding tax debt to pay if I decide to return to the US to live.

 

My main question is.... is there any place I can find out how much tax I actually owe? I'm not going to pay the huge number of private companies $$$$ just so they can overcharge me. Surely I should be able to have some IRS portal where you put in your SS and it generates this information? Or is it a case of filing a late tax return from abroad and then seeing what comes up?

 

Hope someone can help

 

cheers

When I lived in the UK on a work visa as a US citizen, I used TurboTax to file my US taxes, but my income was small (<$50K) and uncomplicated. TurboTax Deluxe will file an FBAR for you (but you need to check that it does in the PDF it generates after submission -- the filer is responsible for verifying their filings), which is critically important if you have over $10K cumulatively in all non-US accounts at any point in the tax year. You can also e-file FBAR directly on the Treasury website since technically FBAR is filed independently of your tax return. During the time period I worked in the UK, I was lucky - I only owed tax on my US-sourced income. Once I returned to living in the US and started earning well, my finances then became more complex so I switched to a CPA for peace of mind.

 

TurboTax will allow you to file back taxes, see here. This approach may be adequate if your finances are uncomplicated and your income is not particularly large. 

 

More on FBAR:

 

The Department of the Treasury has a historical exchange rate look-up tool here that's the official exchange rate for FBAR and tax purposes. This is useful for calculating if you exceeded the $10K cumulative threshold. I keep a Google spreadsheet of my maximum balance each month in each foreign account. According to official guidelines (https://www.fincen.gov/reporting-maximum-account-value), use the exchange rate for the last day of the calendar year and convert to US dollars and round up to the next dollar.

 

According to the IRS, for each account, you need to keep a record of the following for each bank account:

Quote

• Name on the account, 
• Account number,
• Name and address of the foreign bank, 
• Type of account, and 
• Maximum value during the year. 

 

The IRS also states that "you must keep these records for five years from the due date of the FBAR." Keeping PDFs of bank statements and exchange rates can be kept to back-up the record. It's good to keep these records even if you are not required to file since you could be asked to prove you were not required to file FBAR.

 

 

 

 

 

[TBoneTX 47,007]

Phenomenal advice from every participant here.  We need more threads like this.   

[sharky 2]

Thanks soo much for all of that invaluable information!

 

I think it would be wise for me to get a CPA, considering I may have to file an FBAR for last year. When I was last in the US, I filed using TurboTax. Do they have an option to get help from a CPA?

 

 

[TBoneTX 47,007]

I find that CPAs, when first hired, like to see historical returns that have been filed -- it helps them see what was done, whether it was done correctly, and what will be needed.  Everything that you can supply to them as background, do it.

 

I will send you a private message shortly.

[sharky 2]

Also, the most frustrating thing about Turbo Tax (and I have used it before when I lived in the US) is that you need a valid American visa card to be able to pay them to file. Well, clearly I don't have that as I currently live in New Zealand

[sharky 2]

I just double-checked this point and found this:

 

"IRS regulations require a US bank account to receive your tax refund, and you'll need a US bank account (or credit/debit card with a US billing address) if paying additional federal taxes owed"

 

So how on earth is a US citizen living overseas supposed to pay their taxes if they no longer have a US bank account or CC? I really don't understand the logic (or lack off) with regards to this?

 

 

[TBoneTX 47,007]

4 minutes ago, sharky said:

how on earth is a US citizen living overseas supposed to pay their taxes if they no longer have a US bank account or CC?

See if a relative or friend can help, and find a way to reimburse them.  That's a good question to ask a CPA.   

[sharky 2]

I honestly think I'm just going to wait and if I go back to the USA, I will obviously have a bank account and maybe a CC... then I can think of ways to pay off any taxes owing... The system provided for US citizens living abroad is clearly not aligned to filing and paying easily (even if online)... and now that I think back... I'd already been back to the US for 4 years and had not paid taxes for a few years before that when I lived abroad (basically because I didn't know back then either) and the world didn't end when I lived back in CA for those four years....

 

why does it have to be sooo confusing... I'm sure there are lots of people out there that want to pay off back years and they are not given any simple options to do it.

 

[W199 417]

You can do a foreign wire transfer to pay the taxes, and the IRS can mail you a refund check to your foreign address.

 

But can't you just open an online US bank account?

 

Also, banks like HSBC make it easy to have and open US and foreign accounts and do instant global transfers back and forth, free wire transfers, etc..   But you need a high minimum balance to avoid a monthly fee.

 

In anycase, you should have a professional fix your situation. It sounds complex.

[TBoneTX 47,007]

3 minutes ago, sharky said:

why does it have to be sooo confusing... I'm sure there are lots of people out there that want to pay off back years and they are not given any simple options to do it.

Sure sounds frustrating.  CPA might have suggestions.  Costs nothing and won't hurt to ask.