recomendations for good tax accountant/lawyer/cpa for individuals working overseas?
Wednesday, May 5th, 2010 at
6:47 pm
Im looking for any good recomendations for people to assist me in how I should set up my taxes as I work overseas but am in the country more then the alloted 30 days a year.
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If you have somebody you have been using, why not just stick with them. You can have your taxes done by FedExing your stuff to them and having them FedEx anything you need signed back to you. I have several clients who have moved away including overseas and I still do their taxes for them that way.
H&R Block even started an online approval system last year. You could mail your stuff to them, maybe have to make a phone contact or two with your preparer to clarify some details, and when he finishes you return, he calls you with a login id and password so you can go online and review your return (by yourself or while you are on the phone with him) and it all it OK, you approve it online by providing a PIN number. You don’t even have to sign or send anything back. Pretty slick.
If you are in a foreign country for less than 330 days per year you are not eligible to use the Foreign Earned Income Exclusion unless you have a bona-fide residence in a foreign country. If you do have a bona-fide foreign residence all year then the number of days you spend in the US and foreign countries are irrelevant. There are 2 tests, The Foreign Residence Test and the Physical Presence Test. You only need to meet ONE of the tests to be eligible for the exclusion.
If you are not eligible for the FEIE you can always take a credit for the foreign income taxes paid using Form 1116. In fact, that can often be more valuable from a tax standpoint than the FEIE. If the foreign taxes are higher than the US taxes, you’ll always come out ahead using the credit. I lived in Europe for over 10 years and the credit worked out better for me in all but one of those 10 years.
Pick up a copy of the localized version of the International Herald Tribune in the country where you live. There are a number of US tax experts in most foreign countries and most of them have localized knowledge of both US taxes and the taxes of the nation where you are living. They often advertise in the IHT along with other American ex-pat rags. Also, if you live near a US military installation, the in-house rag published on base will often have ads from local tax experts. You may need to seek out a copy though you can often find courtesy copies of it at local news agents for little or no cost.
Be prepared to pay for the service though; competent tax advice overseas comes at a premium price. I was able to bill out at over $200 per hour in the UK over 10 years ago.
You should also pick up a copy of IRS Pub 54 from their website. It will tell you most of what you need to know as a US citizen or resident living and working in foreign countries.