How do I go about filing without coming to your office?
At our firm, we make filing more convenient than going to your local CPA. You can submit your information to us via email, fax, or traditional mail – whichever method is most convenient for you. We will communicate with you by email and/or phone while we process your return. Once complete, we will email a secure copy of your tax return with filing instructions to you for review. If efiling is available for your tax return, we will efile your return for you at no additional charge.
My company did not issue a W-2 because they are a foreign affiliate or a foreign company. Do I have to report this and file a return?
Yes. Any US citizen with income from sources outside the United States (foreign income) must report all of that income on a tax return. This is true whether you reside inside or outside the United States and whether or not you receive a W-2 or Form 1099 statement from your employer.
I have not filed for previous years that I worked overseas. Can I still file?
You can and you need to as soon as possible. If for some reason you are audited later on and the IRS catches the fact that you did not file, they may not allow you to take the foreign earned income exclusion, even if you earned it, because it was not taken in a timely manner.
My last tax preparer treated me as Self-Employed and withheld SE Tax. Is this correct?
In most cases no. If you are actually self-employed or an independent contractor working for yourself and not working directly for a contractor or another corporation, then you may be self-employed and subject to the self-employment tax. Usually you will receive a Form 1099 that shows you were self employed or considered an independent contractor. If you are not self-employed, you should file an amended return immediately to get a refund. This is a common mistake among franchises and non Expat Tax Professionals. Keep in mind that if you did receive a 1099, you may be able to deduct certain job-related expenses to decrease your taxable income.
I have a lot of expenses such as cell phone, calling cards, gear, supplies, laptop, etc. Can I deduct these expenses?
Job related expenses can be deducted if you meet the criteria for itemizing instead of taking the standard deduction.
Can I take the same credits and deductions while working overseas that I would have taken if in the US?
In most cases the answer is yes. However, some credits that phase-out over certain modified adjusted gross income (MAGI) levels will not be available because your foreign earned income is added back in determining your MAGI.
I want to set up a company- a corporation, LLC, or partnership, I am not sure yet. What steps do I take?
Generally, you would have a lawyer or legal representative assist you with this. This is a legal matter, rather than a tax matter. The first step, usually, is to set up your business entity through the Secretary of State in your home state or the state where your business will be located.
I have a lot more questions and hear so many different things from others working overseas. Where can I find the correct answers?
There are many scenarios, myths and half-truths about working overseas. The rumor mill seems to work overtime at overseas job sites. To get the truth about working overseas, you could go to the IRS website and spend your precious time researching it yourself. However, the best thing to do is to spend your time doing what you do best, and leave the tax research up to us, Palazzo & Company, LLC. Contact us directly anytime with your questions or concerns about the tax ramifications of working overseas. You can reach us by email at firstname.lastname@example.org, or by phone at 866-272-9224.