Postcards From Across the Pond: Expat Taxes

I’ve complained about taxes on this blog before. Most notably here, but I’m sure I’ve mentioned it at other times. It’s hard not to; taxes for American Expats are stunningly complex, unfair and onerous, so it’s almost impossible to let tax time slip by without me whining about it in public.

Every year, I suffer the strain of trying to decipher an undecipherable tax code, the pain of having to pay taxes on money I earned in the UK to a country that, logically, has no right to them, and the indignity of having to register with the Financial Crimes Enforcement Network, as if I’m a pedophile on parole.

I have to register with these guys, so I must be a criminal, right?

I am hoping that this yearly humiliation is now at an end.

A while ago, Taxes for Expats e-mailed me with an offer: I let them do my taxes for free, and all I had to do was mention it here on this blog.

I get offers like this all the time. I turn some of them down, the rest I ignore. My blog is not a billboard and I do not seek to endorse products in exchange for compensation. But as I took a second look at this e-mail, several things made it stand out from the others:

There were no misspeled wrods in it
There were no words in ALL CAPS
The tone was businesslike but cordial (they didn’t want to be my best buddy, they were simply offering a business deal)
They had actually at least looked at my blog (others state they are big fans of my blog while making it abundantly clear they have never seen it)
The link to their business didn’t take me to a dodgy-looking website selling sex-aids (but I can overlook that)
When I Googled them, the results were favorable and convincing

So, I replied to the e-mail and proposed that they prepare a dummy tax return with the idea that, once I saw how it was done, I could just copy that from year to year. That way, I’d get my free tax preparation, they’d get a plug on my blog, and I wouldn’t have to hire them again! Win, win, win. Except, of course, for that bit about them not getting my business.

What happened, however, was this:

I was assigned to Ben, my “Personal Tax Preparer.” I thought, “yeah, right,” but I tell you, I don’t care if he was juggling a thousand other clients, he treated me as if I was the only one. We exchanged numerous e-mails, and his responses to my questions were always prompt and polite, even when I was being obtuse.

What I sent to Ben was not my current tax situation, as that is fairly straightforward—I don’t earn any money, so I don’t pay any taxes. In the near future, however, things are going to get ugly. I have several income streams coming from the US, and when I start drawing on my retirement here, things get very complex very quickly.

They also get very expensive, which was why I sent Ben this data, and why I opened the completed dummy tax return documents with a sense of dread.

The final tally, however, was over a thousand dollars less than my calculation. My new best friend, Ben, had filed forms I didn’t know existed and had referenced favorable tax laws that I had never heard of (because the IRS, quite negligently, failed to send me the memo about the new regulations).

My immediate thoughts were, “There is no way in hell I can replicate this,” and “But it’s well worth the $350 fee.”

The result is, I become a client. And I put up this endorsement because, that was the deal. (They said I could say anything I wanted, even that they were rubbish, and I would have said that if they were, but believe me, they are not. If you are an American living abroad, check these people out.)

They can also file your FUBAR for you (it’s actually FBAR, but it will always be FUBAR to me). On this point, I have to admit that FUBAR filing isn’t very complicated or time-consuming. It is, however, a right pain in the arse and I think simply not having to deal with the Financial Crimes Enforcement Network every year is worth the fee.

So, here's the deal:

Standard tax return: $350
FUBAR filing (up to 5 foreign accounts): $75 ($10 for each additional)
All you need to do is go to their website – Taxes for Expats – and sign up.
There are no obligations, you just need to pay them once a tax return is completed.
They can (for 80% of clients) file your return electronically. In some cases, the IRS rules do not allow this, but you can just print out and snail-mail your return.
Once you complete the tax questionnaire (which is very comprehensive and takes a bit of time) you can just copy it from one year to the next and update the figures, so subsequent years will be easy and relatively pain-free.

So, the choice is yours: an annual festival of stress, befuddlement, anxiety and humiliation (as well as the secret conviction that you’ve done it wrong and paid too much), or you can go here, and have these guys do it for you.