| The day I left my suburban life in Kansas City and | | | | the IRS a minimal amount. If I didn’t have the money |
| decided to spend the next 30 months in Rio de Janeiro | | | | to pay for my taxes, I would have had to make an |
| is something that I don’t regret. I was carefree and | | | | offer in compromise and negotiated for a payment |
| loved having left behind my American ways and | | | | plan that suits me. Clearly, that would have placed a |
| embracing their exciting culture. Little did I know that I | | | | huge burden on my career and my current lifestyle, not |
| still had to pay my taxes, nor that Foreign Earned | | | | to mention a trip back to the US. |
| Income was even a sentence that my life would | | | | Hiring a CPA to do my taxes is better, based primarily |
| revolve around!. The knowledge hit me like a ton of | | | | on the fact that they know more about the laws than I |
| brick. Who haven’t heard of IRS nightmares that | | | | do. I found out when I was doing my research that tax |
| consist of every aspect of your life spiraling out of | | | | laws are not static and that changes do occur quite |
| control? I had visions of the IRS levying my bank | | | | often. CPAs are updated with the recent changes and |
| accounts and being subjected to audit reviews. | | | | the complexities, while daunting, are things that |
| My initial thought was to do my research to get an | | | | they’re exposed to on a regular basis. |
| idea of how deep a hole I’ve dug for myself. First | | | | Besides, it takes several hours to figure out my taxes |
| thing I discovered was that all American citizens are | | | | and all the breaks that apply to me. The CPA got it |
| taxed no matter where they are. Secondly, there is no | | | | done correctly at a fraction of the time it would take |
| statute of limitations on tax collections if you never file | | | | me. One mistake and I could be compelled to pay a |
| your return. The deadline for filing the forms is still on | | | | penalty or not get my refund at all. |
| April 15 but the IRS allows for an automatic two-month | | | | Of course, good luck finding a tax preparer CPA that |
| filing extension. I read about this foreign earned income | | | | will allow you to file taxes online…. My previous tax |
| exclusion and this thing about foreign tax credits but | | | | preparer (from when I was back home), literally told |
| I’m at a loss on how to decipher it, much less | | | | me he did not want to deal with e-mail or let alone |
| compute it. I don’t even want to get started on | | | | Skype. I found many options for tax preparation |
| form 2555 or the bona fide residence test. | | | | services, but I did not want to do this alone, and the |
| The Dilemma – Tax return preparation | | | | CPAs I found were unresponsive and did not seem in |
| To say that I was scared would be putting it mildly. I | | | | tune with the latest technology. I did find a good page |
| was downright terrified of being asked to pay IRS | | | | to file income taxes online, ran by Certified Public |
| penalties and IRS interest charges that are far beyond | | | | Accountants that allows you to work through the |
| what my savings could cover. If I’m found to have | | | | internet and I’m sticking with it (They will prepare |
| willfully violated the requirements to file, I could go to | | | | your tax return or help you prepare your own.) |
| prison for a minimum of five years. I don’t take that | | | | Looking Forward |
| lightly and I didn’t want to take the risk of being held | | | | From now on, I intend to pay my taxes on time. In fact, |
| accountable for my ignorance. | | | | my CPA has already given me tips on what I should |
| I placed calls to the IRS and attempted to negotiate | | | | do or avoid that would minimize my tax exposure – |
| with them myself. I soon discovered that unless I had | | | | Little bit of tax planning has saved me tons, specially |
| an expertise in tax matters then I wouldn’t be able | | | | planning my trips around the physical presence test to |
| to get a word in. That’s when a friend of mine | | | | meet the 330 days. Most of all, I get a sense of |
| recommended that I get in touch with a CPA – of | | | | security from getting a professional do a task |
| course first I had to understand: What is a CPA?. | | | | that’s very sensitive. |
| Working with him was the finest decision I’ve made | | | | Everyone’s tax problem is unique and after |
| over this whole fiasco. | | | | admitting that I’m unable to brave the twists and |
| The Solution to my tax return preparation woes | | | | turns of the tax laws, I asked for help -- which I got |
| I hired a tax accountant. On our first online meeting, he | | | | and which I’m very grateful for. You shouldn’t |
| instantly put all my fears to rest. I learned that if I meet | | | | have to be under financial stress when the solution is |
| the income threshold then I’m required to file a tax | | | | really right under your nose, except that you didn’t |
| return – even if I live overseas. He gave me a | | | | recognize it for what it was. To get out of the mess |
| rundown of the credits and exclusions I would qualify | | | | and clear your head of any misgivings, let the |
| for. It turned out that after the deductions, I only owed | | | | professionals do what they do best. |