Because your expatriate clients are not living in the United States, their tax obligations are more complicated than an average taxpayer.
1 min read
Changes in technology have evolved our standard “9 to 5” jobs to gigs that simply require a computer and internet connection. And with these technology changes, the way Americans work has changed, too. The number of Americans living and working abroad has multiplied in the last several years – 8 million Americans now live abroad.
These expatriates are commonly known as digital nomads, meaning “someone who is location independent and uses technology to perform their job.” Many of these digital nomads own businesses or work for companies that allow them to work outside an office environment. Because these nomads are not living within the United States, their tax obligations are more unique and complicated than an average taxpayer.
The primary reason expatriate taxes become so complicated is not surprising: location, location, location. Here are the basic tax law differences you need to know about when you prepare taxes for clients who live and work outside of the United States:
After they begin working abroad, many taxpayers eventually choose to renounce their U.S. citizenship, often due to staggering U.S. tax obligations. The number of taxpayers trading in their passports has skyrocketed in the past several years. In 2015 alone, 4,279 Americans renounced their U.S. citizenship, up 20% from 2014. That is 18 times as many as in 2008, and the third year in a row that's set a new record. Once these expats renounce their citizenship, they cease their tax filing obligations to the United States.
If your client has moved abroad, then they will need to be aware of how their tax obligations have changed. This overview covers some of the basics that will help digital nomads, but with offshore companies and foreign investments, tax obligations of digital nomads can become far more complicated than this post can realistically cover. If your client’s situation exceeds the scope of these basic filing requirements, consider referring them to a tax attorney or another accountant that specialize in foreign filing requirements.
Interested in learning more about the Foreign Earned Income Exclusion and the Foreign Tax Credit? Check out How to Minimize US Taxes for Expatriates.
Explore more of our recent Articles, User Stories, and Ebooks.
3 min read
3 min read
Canopy takes the headaches out of client management by offering a way to keep client info organized.
I love how easy it is to setup a new client in this software. Once set up, it's one click to get IRS transcripts downloaded for my review. This saves me at least an hour each week in comparison to the software I used to use.
This makes workflow for tax resolution manageable. This business is a bunch of hurry up and wait. This system helps to refresh my memory while transitioning to different clients.
The ability to securely share documents with clients as well as complete POAs from client contact data already in Canopy. The ability to route workflow between team members with color coded statuses allows us to work efficiently.
Cool features, outstanding customer service, constantly updating to make it better. I love that I can upload files easily to a secure client portal and we don't have to email files anymore. Absolutely can't imagine not having this software.
It's safe and secure. Clients are able to upload documents and the documents are saved their portal which as a result, keeps us better organized. The task feature keeps us organized and we know exactly the status of each client.
Submit this form, and we will be in touch soon to give you a custom demo.
Set a time for one of our product specialists to give you a guided tour practice.
Leave a comment!