If you own a business in foreign country or doing job there being a citizen of America, do you know that you are required to pay taxes? No! If you are residing abroad, you might not be aware of the fact that US government and IRS required that you should file your taxes religiously. It would allow you to stay away from severe IRS issues and concentrate on your work. There is myth among US citizens working overseas that they are not liable to pay taxes as they are not earning in their country. So, if you think you can get away from the IRS without much of work despite paying and filing taxes, think again as IRS knows every trick to take its money out.
In case, you are clueless about how to file your taxes while living outside US, you can get information from IRS’ website or get in touch with an expert tax attorney who specializes in handling these kinds of issues. The tax professional will make you aware of the process of filing taxes from foreign country and IRS tax relief options you can avail. For up to date information, you can also get in touch with US embassy in the country you are residing. You can easily get references from the embassy. Since you are living in a foreign country, tax attorney is the person who can help you in the best possible way to file your taxes without getting into any kind of mess. You can manage your work and help tax professional to plan and prepare your taxes before filing them.
You would need to use the Foreign Earned Income Form and IRS Form 2555-EZ or IRS Form 2555 to file your taxes while working or carrying out your business operations in a country other than US. In order to qualify these forms and use them to file your taxes, you need to be a citizen of United States of America or a resident of US who is living in a foreign country. Most of the times, if you are filing taxes from outside your country, same rules of filing taxes would apply. Feature that goes in the favor of taxpayers residing in foreign country is the two month extension. As a citizen of America, you can take advantage of two months extension in order to file taxes from abroad.
One of the major problems that is being faced by taxpayers living in foreign countries is arranging W-2 from their last employer in US. You won’t get any leniency in this regard and you would need to arrange this document by hook or by crook. You can obtain electronic copies of W-2 form on temporary basis and physical documents can be mailed to you.