If you’re an American living abroad, did you know that you still have to file a US tax return each year? Nathalie Goldstein, CEO of MyExpatTaxes and an IRS enrolled agent, explains five things you need to know about US expat taxes in 2023. 

For most Americans, living outside the United States brings adventure and new experiences. One typical American experience will however follow you wherever you go. That experience is the annual tradition of filing a US tax return. It’s well known that Americans living in the US need to file a return, but it may be news to some that even Americans living outside the United States need to report their annual income to the IRS.

As an IRS enrolled agent, my goal is to help make the US tax system a little easier for expats to navigate. To help start your year off right I’ve put together five things you need to know about filing your US taxes from abroad in 2023.

1. You’ll almost certainly have to file an American tax returnIf you’re single, you’ll need to file a US tax return in 2023 if you made 12.950 US dollars or more in 2022. The minimum income threshold is the same, whether you’re an American living in the States or abroad. 

If you are married to a non-US citizen, you’ll probably want to file as married-filing-separately. Doing so will keep your spouse’s financial information off of your tax return. The downside is you will need to file if you made as little as 5 dollars in 2022. If you choose to file as married-filing-jointly, you’ll need to file a tax return if you and your spouse’s combined income was at least 25.900 dollars. 

Anyone who is self-employed needs to file a US tax return if you made 400 dollars or more in net self-employment profit 2022, even if overall you are under the filing threshold. This is because you also could be subject to self-employment taxes, so be sure to file and pay by April 18, 2023. Paying on time means you’ll avoid any late penalties.

2. It’s unlikely that you’ll have to pay US taxesBut the good news is that even if you probably need to complete a tax return, it’s very likely that you won’t owe any US taxes. Why? Two reasons: First is the Foreign Earned Income Exclusion and second is the Foreign Tax Credit.

The Foreign Earned Income Exclusion (FEIE) is the most popular way that expats avoid double taxation. In 2023, when filing your 2022 tax return, you can exclude up to 112.000 dollars of foreign-earned income. Be warned though: if you are a parent abroad and plan to claim child tax credits, you won’t be eligible to get any child credit related refunds if you use the FEIE. Instead, we suggest using the Foreign Tax Credit (FTC).

If you’re living in a high-tax country like most European countries, the FTC is another great way to avoid double taxation. By using it, the IRS lets you credit the taxes you paid to your resident country toward your US taxes.    

3. You could qualify for a refundEven better news! If you live outside the US and pay zero US taxes, you could still be eligible for a tax refund from the IRS. The most common way expats will see a refund in 2023 is from Child Tax Credits. If you have qualifying dependents who were under the age of 17 on December 31, 2022, you can receive up to 1.500 dollars per child as a refund.  

The second most popular way Americans abroad will see money back from the IRS is via stimulus payments. While there were no additional stimulus funds offered in 2022, we know there are still expats out there who never claimed their 2020 or 2021 payments. If you’re one of those expats, you’ll need to file a tax return for the years in question. 

4. You can still catch up if you’re behindDon’t be nervous about bringing yourself to the attention of the IRS if you’re a little behind on your tax returns. The IRS has introduced a tax amnesty program for Americans living outside the United States who didn’t realize they needed to file a tax return. 

The process is known as the Streamlined Procedure. All you have to do is fill out tax returns for the past three years, plus FBARS for the last six years. Even if you haven’t filed for several years, the IRS will consider you tax-compliant once you complete the process. The plus side is that most expats going through this Amnesty Procedure in 2023 will end up getting refunds from their back taxes! 

5. You might need to file an FBARAn FBAR, or Federal Bank Account Report, is how you report your foreign accounts. Regardless of whether or not you need to file a US tax return, you still may need to file an FBAR, if in any year you have a total of 10.000 dollars held in any number of foreign accounts.

Since the FBAR is reported to the Financial Crimes Enforcement Network (FinCEN) and not the IRS, your tax status will have nothing to do with your FBAR. Filing an FBAR is easy and can be done online in a matter of minutes, whether directly through FinCEN or a service like MyExpatFBAR – which guides you through the process step-by-step and submits everything electronically.

Although no one likes taxes and the burden to file as an American abroad is certainly annoying, Nathalie’s goal is always to make filing as simple as possible. Anyone looking to file their US taxes should seek out a tax professional who specializes in expats, as traditionally tax software isn’t optimized for Americans Abroad. That’s why she created MyExpatTaxes – to make filing your US taxes easy and affordable! 

19 July 2022, by Rutger Kanters

The first signs of a cooling housing market are on the wall, or so the figures of the Dutch Association for Real Estate Agents (NVM) tell us. Even so, it is too early to celebrate. Rutger from Waltmann Makelaars explains how the interest rate curve over the coming months will offer more clarity for people looking to buy a house.

Concern over interest ratesInterest rates have been rising since the start of the year. These increasing rates are raising some concerns amongst potential buyers, who doubt whether buying a house is what they want or should be doing right now. Meanwhile, vendor move to quickly put their houses on the market now.

This combination of trends seems to offer a bit more breathing space in the current housing market. Quarterly figures don’t tell us a lot about the current situation yet, but real estate agents have noticed a slight increase in the number of available properties.

Changing housing sectorThe increasing interest rates also directly affect the size of the mortgage people can get and, thus, also the housing sector in which the buyer may find a property they can afford. Shifting interest rates mean that the house you had set your heart on is suddenly beyond your budget and goes back onto the market.

Decline in trustThe trust people had in the housing market has further declined. Consumers are worried about their financial situation, and rising inflation, as well as increasing prices for resources and energy, have further put a hole in buyers’ spending budgets. Such extra costs affect buyers instantly.

The rising interest rates and high house prices don’t contribute positively to our trust in the housing market. Buyers stay put as their financial situation is less secure than before. In practice, this mostly leads to fewer viewings and less overbidding.

No extreme decline in housing pricesDespite some property bubbles, housing prices are not expected to fall massively in the short term. They may even still increase if interest rates remain around 3 percent. However, the situation could change drastically if rates go up to 4 or 5 percent. Still, that is a matter of conjecture.

Waltmann Makelaars know exactly what a house is worth in this changing market. Don’t hesitate to get in touch to get expert advice, increase your chances and options to secure the house you want, and not overpay. 

Just started a new job in the Netherlands? Or maybe you’re wondering whether to accept a new contract? Expat employment law expert Godelijn Boonman of GMW lawyers shares her tips for assessing and understanding a new employment agreement.

So, you’ve been offered a new job in the Netherlands in 2022. The position sounds good, the terms sound reasonable, and you’re excited to accept. Now you need to check the contract before you sign it. The only challenge is that you may not know much about Dutch employment law – making it tough to understand what each clause means for your rights.

Know your contract type, know your rightsThe first thing you need to ascertain is whether you are entering a contract for a fixed period (temporary) or for an indefinite term (permanent). This determines which rules will apply to your employment – and therefore determines your rights.

If your contract has an end date, it is a temporary contract. The maximum length of a temporary contract is generally three years.

Start well: probation periodIf your contract includes a probation period (trial period), then you or your new employer can terminate the employment during the trial period without giving any reason. A probation period must be agreed in writing.

Contracts of less than six months may not include a probation period. Temporary contracts for longer than six months may include a probation period of a maximum of one month. Indefinite contracts may include a probation period of a maximum of two months.

In between: conditions and changesYour contract, together with any applicable general terms and conditions or Collective Labour Agreement, stipulates the conditions under which you agree to work. This includes key information such as the location of your workplace, your salary, hours, job title and the payment schedule.

In the Netherlands, you also want to check for:

Annual leaveFull-time employees must be given a minimum of 20 vacation days per year, excluding national holidays.

Vakantiegeld (Holiday allowance)Eight percent of your annual salary is reserved as “holiday money”. This amount may be paid annually or otherwise – but it should always be mentioned.

Unilateral changes clauseIf your employment terms contain a unilateral changes clause, then your employer can change the conditions of your employment without your prior consent. As this may include topics such as changing the location of your workplace, or a company requirement for corona vaccination, it is very relevant. Do note that this is not easily done by an employer. Even though the contract has this clause, the employer needs to meet strict conditions before they can unilaterally change your contract.

End well: notice and terminationMake sure you check your contract’s stipulations regarding notice periods and termination.

Notice periodsUnless otherwise agreed, an employee’s notice period is one calendar month. If you have been an employee for less than five years, then your employer’s standard notice period will also be one month. Note that different notice periods can be agreed  upon, but the employer’s notice period must be double that of the employee’s with a maximum of six months for the employee and therefore 12 months for the employer.

TerminationTemporary employment contracts terminate on the date they end. Indefinite contracts can only be terminated by: the employee resigning, through a mutual termination agreement, via a UWV/court dismissal, or by summary dismissal (being fired on the spot).

Restraint of tradeIf your employment agreement includes non-competition, business relation or partner relation clauses, try to negotiate these upfront; they could limit your future options.

If you need help assessing your new employment agreement, contact GMW lawyers’ team of English-speaking employment lawyers for assistance. Call 070 361 5048 or submit your question online.