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Every time I hear or read about paying taxes, my eyes grow wide and you might as well speak a foreign language to me. I unfortunately, have very little understanding on how they work and what documentation is required. Thankfully, through a couple of American expat bloggers in Spain, I found a tax service that specializes in specifically helping US citizens living abroad file their US taxes. Through Emily of This is the Milk and Kate of Kate’s Travel Tips , I have a better understanding of how to navigate taxes as an American living abroad.

When I lived in the states, my taxes were fairly simple since I worked as a waitress and a dog walker after graduating college to save money. With those, it was only required that I file a W2 and W9 and the documentation was completed and provided by my employer, I didn’t have to do anything. At that time I simply handed my mom those documents out of complete fear and asked that she file them for me. I was clearly over my head and I’m still astounded to this day that universities still do not teach you anything about how to do taxes (unless your a specific major) *eye roll*

*Please note that at this time of writing, the tax deadline for 2019 returns was extended to July 15, 2020 due to the pandemic. Normal tax deadline is June 15th for expats and can be extended further to October 15th upon request*

Since I was without a job in the states for all of 2019, my assumption was that I do not have to pay or file anything. I mean, I didn’t have a job job so why? EH WRONG. The US government wants to know all of your business, don’t forget.

Now that I have moved to Spain, my financial situation is much more complicated. However! Just because US citizens are required to file when living abroad, doesn’t necessarily mean you owe anything. In many cases, they just want you to report it and leave it at that. Woohoo! If, like myself, you don’t know where to start or are worried about filing correctly, I highly recommend using services like Taxes for Expats to help you maneuver this complicated tax world.

Filing Taxes as an Expat

I was very confused and nervous that I would owe double taxes in both the US and Spain. But, because of some awesome rules like Foreign Earned Income Exclusion (FEIE) and Foreign Tax Credit, you won’t pay double taxes *takes deep sigh of sweet relief*

Here is my situation in Spain currently:

• I have a student visa in Spain, making me a temporary resident
• I am still a legal US resident
• I do not have a Spanish work contract
• I definitely earn less than 100k a year (As an English teacher/counselor I earn less than 10,000 $/€)

You will first fill out a tax questionnaire that includes categories such as personal details, past filings, income in and out of the US, deductions, non-US financial accounts, etc. If you are unsure of an answer to a question, you just have to send a message in the chat box to a CPA and they’ll be happy to help/clarify! I was paired with a CPA quickly after submitting my questionnaire and she clarified many questions that I either did not answer fully or didn’t know the answer to. Shout out to Wendy for answering my questions within an impeccable response time!

For the 2019 filing year, I filed the following:

• Form 1040 – Individual Income Tax Return
• Form 1116 – Foreign Tax Credit (Individual, Estate, or Trust)
• SCH D (1040) – Capital Gains and Losses (This one is unique for my situation because I have individual accounts with stock and investment funds in the US. If you do not have these, then of course you will not file this document)

Understand what an FBAR is

It stands for Foreign Bank Account Report. If at any point in time you have more than $10,000 USD in all of your foreign bank accounts during a calendar year, then you will need to file an FBAR. This document is filed separate from a income tax return. This one is pretty easy to do actually!

Understand that consequences can be more than money!

Not filing can result in huge additional consequences, that involve more than just paying fines, for example:

• Your potential foreign spouse wants to get US citizenship – the government will want to know your tax business
• Relocating back to the states for work where you haven’t been filing. So where have you been the past 15 years?
• Can be declined for making investments
• Problems may arise in the near future when the times comes to renew your passport and the government may require presentation of tax reports
• If you have or plan on having children, you can experience potential problems with any kind of financial aid

My experience with Taxes for Expats

Before creating an account and completing the questionnaire, I submitted some questions to the virtual chat box on their homepage so I could get a clearer idea. The man I spoke to was very informative about things like the FBAR and even sent me additional resources of services that could also help me file Spanish taxes in Spain if I needed them. From our conversation and the fact that I knew now I needed to file US taxes, I signed up!

Even though it can be a confusing process, services like these can lighten your load and provide professional, honest insight to you specific needs and requirements. After going through the questionnaire, several additional questions, and documentation with my CPA, I do not feel near as intimidated by taxes as I did before. This upcoming fall I will continue living in Spain and completing my Master’s degree while working. I will continue to rely on Taxes for Expats for the next upcoming tax year.

Hopefully this provides a little more insight on navigating taxes as an American living abroad! If you are living abroad and find yourself struggling with tax preparation, see if Taxes for Expats is right for you!

Disclaimer: This post is sponsored by Taxes for Expats, who prepared my 2019 tax return in exchange for an honest review of their services. Thank you! Discover the services they have to offer here!

All writing and opinions are my own. Photos that are not my own are accredited to rightful owners in description. Any questions or comments, feel free to comment below and I’ll get back to you!

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For more experiences living in Spain, check out How to Spend One Week in Madrid