Tips From an Expat Tax Expert: Mistakes to Avoid When Filing Taxes as an Expat

American citizens must be mindful of U.S. tax jurisdiction and the requirements for filing taxes as an expat. Shutterstock

Digital nomads—people who travel the world or live abroad while working (sometimes remotely)—may dream of watching the sunset from an ancient castle in Santorini, Greece, while knocking out a report. Or they may seek the enchanting beauty and serenity of Kyoto’s Arashiyama Bamboo Grove after finishing a workday in a nearby cafe. Unfortunately, the dream of living abroad and working from postcard-perfect locations too often becomes a financial dilemma for digital nomads who are U.S. expats. The already complex nature of filing U.S. taxes can become even more complicated. As an expat living abroad, you are required to comply with additional requirements and nuanced rules you may not be familiar with when filing taxes. The penalties for mistakes can be costly.

For these adventure-seekers, a life abroad comes with a long list of to-dos and challenges. Making an effort to understand tax laws, both in the United States and foreign countries, may be the last thing they want to do. However, being informed and proactive in managing tax obligations is crucial, according to Nathalie Goldstein, CEO and co-founder of MyExpatTaxes, a platform specifically for filing taxes as an Expat.

US Expats Must File a Tax Return With the IRS

“Many expats overlook the requirement to report income earned outside the United States,” Goldstein says. “This is particularly common among digital nomads or self-employed individuals who have U.S. clients, not realizing that their work performed abroad is still subject to U.S. taxes.” American citizens must be mindful of U.S. tax jurisdiction and the requirements for filing taxes as an expat. These regulations follow you anywhere in the world that you may go as long as you remain a U.S. citizen.