Filing Taxes in the Foreign Service


Filing-Taxes-Foreign-Service.jpgFiling-Taxes-Foreign-Service.jpg

filing taxes foreign service, marriage tax changes, working abroad, foreign incomeWhat’s the deal with taxes?Kail and I finally filed our taxes last week — the latest I have ever filed my taxes (I’m not one to procrastinate). A little known fact (well, little known on the interwebs): Kail and I met while working at a tax policy organization in DC. Romantic, right?You might be thinking that we probably couldn’t wait to get started on our first married-filing-jointly tax returns. But you are wrong. Oh, so wrong. We’re not accountants.I have always used online tax software (H&R Block) to file my taxes. It’s usually a painless endeavor, except that one year when I had three jobs and moved from Virginia to DC. Oh, and last year, when we got married, left/started jobs (or both), moved from DC to Virginia (to El Salvador, but for all intents and purposes we are legal Virginia residents) and had some other investment-related tax things to deal with.Having to file taxes as a partial-year resident in Virginia is not complicated; for some reason, Washington, DC has to make everything a slightly bigger pain the rear. But it’s done (thanks, Kail!) and hopefully everything is accurate and we don’t get audited. By writing this, I’m sure I am jinxing us.This is the last year we are filing taxes ourselves. It’s only going to get more complicated since this year I started working for a local NGO and am earning foreign income, paying foreign taxes and need to withhold my own payroll taxes since I am technically self-employed in the eyes or the IRS. Or something. We’ll be enlisting the services of a local accountant who specializes in expat/Foreign Service tax-filing.Have you filed your taxes yet? Less than two weeks to go!

Published by La Vie Overseas

I'm Natasha -- writer, runner and wife to a Foreign Service Officer with USAID. Current location: Frankfurt, Germany.

4 thoughts on “Filing Taxes in the Foreign Service

  1. Accountants are worth it. Let me know if you need a recommendation.Just some nuggets I’ve learned about:keep all of your boarding passes when you enter and leave the US. You will need to keep this for an audit if you plan on claiming the foreign income exclusion under the physical presence test. The physical presence test requires you to be out of the country for 330 days of a 365 day period – so, for instance, if you made money in 2012 while in El Salvador, you’d probably be able to file an amended return and get a small amount of money back (based off of the amount of the year that you were outside the US). Talk to an accountant – it’s confusing :)related to the above, if you get paid for doing work while physically in the US, keep track of it. You might not be able to claim the foreign income exclusion on that moneyyou get a free extension until July if you’re out of the country in AprilBasically, accountants don’t cost that much and have been totally worth it for us.

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  2. Accountants are worth it. Let me know if you need a recommendation.Just some nuggets I’ve learned about:* keep all of your boarding passes when you enter and leave the US. You will need to keep this for an audit if you plan on claiming the foreign income exclusion under the physical presence test. The physical presence test requires you to be out of the country for 330 days of a 365 day period – so, for instance, if you made money in 2012 while in El Salvador, you’d probably be able to file an amended return and get a small amount of money back (based off of the amount of the year that you were outside the US). Talk to an accountant – it’s confusing :)* related to the above, if you get paid for doing work while physically in the US, keep track of it. You might not be able to claim the foreign income exclusion on that money* you get a free extension until July if you’re out of the country in AprilBasically, accountants don’t cost that much and have been totally worth it for us.

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    1. Super-helpful! I am about to return to the U.S. for the first time since arriving so I will save my boarding passes. Yeah in the brief conversation I had with the accountant when he was explaining the foreign income tax credit and other things I was just like aaaah I don’t get it. I think we have a good person here in El Salvador but then I was worried about what would happen when it comes time to file for tax year 2014, when I will probably have worked in El Salvador (assuming my current job continues going well) and may or may not have worked in another country, but I will still need to file Salvadoran taxes and will be living who knows where.That is a long time away and who knows what is going to happen but the thought occurred to me. I’m a planner, what can I say?!

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