More Tax Filing: US Version

In case I haven’t made it obvious, 2020 seems to be dominated so far by the issue of taxes.

If you’ve read through my previous post, God bless you, you poor soul.

And a very heartfelt thank you.

😍

I don’t know if I helped anyone with that post, but I just wanted to get it out of me, kind of like a purging of something bad that had been building up in my body.

My post was just a jumbled mess–but it’s out there. Hopefully, someone will find it useful when they are filing their own Japanese taxes.

This time around, though, I’m about to tackle my US taxes. As a US citizen, I am required by law to file taxes even though I earn an income from a foreign entity based outside of the United States. Other countries don’t require their citizens to do that.

(Oh, the unfairness and absurdity of it all!)

The good(?) news is that I only need to file and not pay taxes because I don’t really make that much money.

However, just filing costs US expats a lot of money.

(Oh, the unfairness and absurdity of it all!)

For 2018, US citizens who earned an income above $103,000 (I think) needed to pay taxes on the income they earned above that threshold. If you earn less than that, you don’t need to pay taxes if you qualify for the Foreign Earned Income Exclusion. You also have to prove that you were not in the US when you earned this income–the Bonafide Resident test.

I qualify for both, but my real issue is whether I should file these taxes on my own or use a service to do this.

Last year, I used the services of a company that specializes in US expatriate tax filing. It cost me about $1600. Through my own fault, I let myself neglect this very important part of being a US national. Since I wanted to take responsibility for that mistake, I knew I had to bite the bullet and just pay that amount.

At that point, it was worth it. I really needed to get caught up with my filings for the last three years. I’d attempted to do it all online, but it was all confusing. I couldn’t make the forms fit the information I had. The whole healthcare coverage part of the forms was difficult to figure out because I had Japanese coverage, not US healthcare. I also had to file the FATCA and the FBAR. I also had so many questions about how to fill out the investing part of the tax forms.

I was overwhelmed and needed help and I thought paying the company $1600 was worth it for my peace of mind.

This year, though, now that I am all caught up, I am debating whether I should try to do this all on my own. I think I can figure it out. Plus, if I use the same company to do my taxes this year, it’s going to cost me at least $350–for one year’s worth of filing.

That price is making me hesitate. Last year, I feel like I got a bargain because they helped me out with the last three, almost four years of tax filing. It seemed really worth it.

Now that I only have to do one, I’m debating whether it’s worth it to pay that $350. I looked at other companies and this seems to be the standard price. If that’s the case, might as well stick with the same company. I thought they did a good job and was satisfied with the work they did last year.

woman holding a smiley balloon
Photo by Just Name on Pexels.com

To be honest, I’m leaning towards paying someone else to do my US taxes again this year. After my experience with my Japanese taxes, I think I’m done trying to do things on my own. I need professional help and I’m definitely not an accountant. Plus, there seems to be changes in the US tax laws that went into effect last year. I don’t know enough about it to attempt to do it on my own.

I think the compromise would be to pay for the services this year and attempt it next time. I’ll need to figure it out eventually, so I can always try to do it on my own next year.

All in all, it’s a pain in the ass.

Screen Shot 2018-11-27 at 10.56.41

 

*I am not a tax expert so please check out the IRS website if you are a US Expat trying to figure out your tax filing. This is only an anecdote and a personal account on a blog.

3 thoughts on “More Tax Filing: US Version

  1. Hey, if you want a more affordable, simple way to do your US taxes, I suggest you take a look at MyExpatTaxes.com. User-friendly software, from a company founded by an American expat. I got my taxes done in less than 15 minutes.

    Like

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