Hey there
So our big move is after Christmas this year we just bought our house in donegal and are v excited to finally be heading home .
My question is next April we will need to file taxes by law correct??? If we don't file them.....what are the consequences...if we don't earn there after this year why need to file we couldn't possible owe anything??we don't own property were not keeping bank accs phones etc.... Just looking for advice or info preferably from both sides-someone who left and never filed again and someone who's on top of it every year.
And secondly covered ca has been the Bain of my existence and a constant stress one of the main reasons we are moving anyone have an experience with ending policy and leaving country.
Thanks
Hi Janey,
Thanks for bringing up this topic. It's a very important subject for anyone moving from the US to anywhere in the world.
You are correct. Yes, you must file US taxes. All US citizens and green card holders must file US taxes every year, by law. I don't know what the consequences of not doing that are, but I'm sure they could potentially be severe. I'll ask a couple of US expats, to see if they know more.
The US (and some US states) assess your foreign income, and can claim tax money from you. There is a foreign exclusion credit (which I think is in the 95-100k region), but aside from that, your foreign earned income can be taxed in the US.
Last year I filed my taxes with a tax service for the first time ever. Having income in 2 countries complicated matters beyond me being able to do the necessary documentation myself with TurboTax (amazon link). I used a service call Taxes for Expats. It's not cheap to have foreign taxes taken care of, but honestly, having the headaches and stress removed made it worth it.
Can you fill us in a little more on Covered CA? Why is it such a painful thing to deal with?
Depending on what type of Visa you are applying for you may need to keep health insurance.
For reference of participants not in the US or California. Covered California is the HealthCare Exchange for California, and while I don't know their specific issues, I do know that there have been reports of limited number of doctors, and plans not matching what they were described as.
If you don't file taxes you can be barred from entering the US, have your Passport revoked, estimated taxes set by IRS, and because of FATCA, FBAR, and some reciprocal agreements between countries there are collection options for the IRS even in Ireland.
@dorzak - are you saying that even if someone moves to Ireland, they may need to maintain a health plan in the US? If that's the case, I'm sure it must be only for emigrants who are not planning on moving permanently out of the US.
re:taxes - unless you're personally well-versed in the area of expat taxes, I highly recommend getting professional help. Based on what David says above, it's not something to mess around with.
I am not a tax lawyer but my understanding is you have to maintain health insurance that meets the minimum standards for coverage, or pay a penalty when you file your taxes. The penalty kicks in for tax year 2015, which is the one due in a few weeks. (April 15, 2016)
All,
I have a question regarding taxes.
For those of you that have filed American taxes from abroad, how much of it was claimed by the US? Was it a ridiculously high amount?
@moveclubadmin, what does "There is a foreign exclusion credit (which I think is in the 95-100k region)" mean exactly?
Regarding US healthcare... @dorzak is right. Even in Ireland Americans will need to subscribe to some sort of American healthcare so they are not hit with a tax penalty at filing time.
@kwalsh112 I'll write about it another time, but I got badly screwed by CA for taxes. Essentially they taxed all the money I made in Ireland as if I had been living in CA the entire year. So I paid tax on that income in 2 places.
The foreign exclusion credit applies for federal purposes (from what I understand). The IRS does not tax income up to a point (that's the 95-100 ish amount). I think this only applies to countries where there is a tax treaty (Ireland being one of those countries). CA on the other hand, has no such treaty. Consult with a tax pro for your own unique scenario is my best advice really. Taxes for Expats have been my go-to service. I don't think every state has the same (over)reach as CA, but find out in advance so there's no shocks.
@moveclubadmin That's a shame about the State of California. I'm interested to hear about how the Federal Return went as well! 🙂 Taxes for Expats seems to be the way to go.
There are plenty of services to choose from. I went with them, and have been happy with their service. I will warn you though, it's expensive to file taxes from abroad. It's complicated, so they charge accordingly. I was used to always using TurboTax, and therefore really felt the pinch of paying someone to prepare them for me.
The Federal part was fine. You do have to declare all your income like you would normally, regardless of where it was earned. The tax guy calculates the US $ equivalent etc for you, as you can't put the amount earned in Euros. If you have any specific questions, I'm happy to try to answer.