# Which expat software is the best



## kellybrassano (Jul 26, 2021)

In the US I'd use turbotax but as an expat what would one use to e-file and make things simply? Is myexpattaxes.com a good program or is it better to keep using turbotax and just add everything you make under the foreign income section? Can anyone share experiences on what to use, which is most efficient and easy for doing it myself


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## Bevdeforges (Nov 16, 2007)

It used to be a matter of finding out which of the Free File programs were capable of handling the forms 2555 and 1116 (the two main expat forms), but I'm told that TurboTax has recently opted out of the FreeFile program altogether and apparently other providers are likely to do the same in the coming months. But as long as you purchase a package that includes support for the necessary forms, any of the standard tax preparation software packages should be OK. The one issue is that e-filing (even using a commercial program) can be tricky from overseas. (This is one of those places where the old expression "Your mileage may vary" comes in handy.)

I'm not familiar with the expattaxes site you mention, but a quick look at the site gives you an idea of the pricing. If you're used to doing your taxes yourself, there really shouldn't be any need to pay a couple hundred dollars to have them done for you, and I'm wary of their claim that you don't have to mess with the actual forms. (Though that's my inner accountant talking.)


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## kellybrassano (Jul 26, 2021)

Thank you for this. What do you mean e-filing overseas is tricky, the sites say they e-file for you. Worst case scenario turbotax does it if I'd have to resort back to them and yes I am used to doing my taxes by myself but still always use a program, so either way I have to pay.

Since you've revealed you're an account, I'd have a question. Here in Germany we pay taxes (after the 11,000 euro threshold) but we also have to pay social tax (health, unemployment, pensions) especially as self-employed. Can I include that social tax as TAXES PAID in foreign country when doing the 1040 for the US or does social tax not count and only regular taxes for that matter?!
Secondly, Nononymous already stated that it's untrue that 1 in 20 expats are audited every year, in your opinion and experience how often do average joe's overseas get audited on their tax returns? Is it just like in the US or is it higher, as the auditing ordeal is really the one thing that holds me back even to start filing as I don't wanna walk down this road constantly.
Lastly, do you do expat taxes for people...


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## Bevdeforges (Nov 16, 2007)

kellybrassano said:


> Thank you for this. What do you mean e-filing overseas is tricky, the sites say they e-file for you. Worst case scenario turbotax does it if I'd have to resort back to them and yes I am used to doing my taxes by myself but still always use a program, so either way I have to pay.


When you're filing from overseas, there are any number of "gotchas" that can interfere with your ability ot e-file. The classic for a long time was entering a foreign address in the system. Then, for those who are married to a foreigner with no US tax liability, the system can reject your return if you file as "married filing separately" if you don't indicate a US SSN for your spouse or if you use what always used to be the standard of entering "NRA" (non-resident alien) in either the space for your spouse's name or their SSN. I'm told these problems have been fixed (or worked around) but have seen no specifics on how. In your shoes, I would at least try to see if there are any remaining Free File providers who can take on someone living overseas before paying to file a return that basically says, "hey, guys, I don't owe you anything!" There is also the option of using the Free File Fillable forms system (ignore the thing about having to have a minimum income) but that system can be really kludgy and doesn't do any "prompting."



> Since you've revealed you're an account, I'd have a question. Here in Germany we pay taxes (after the 11,000 euro threshold) but we also have to pay social tax (health, unemployment, pensions) especially as self-employed. Can I include that social tax as TAXES PAID in foreign country when doing the 1040 for the US or does social tax not count and only regular taxes for that matter?!


Technically, only income taxes can be used if you are claiming taxes paid to a foreign country. If you are paying the social insurances, that's completely separate - and actually is how you justify not having to pay "Self-employment tax" (which is basically Social Security) to the US.



> Secondly, Nononymous already stated that it's untrue that 1 in 20 expats are audited every year, in your opinion and experience how often do average joe's overseas get audited on their tax returns? Is it just like in the US or is it higher, as the auditing ordeal is really the one thing that holds me back even to start filing as I don't wanna walk down this road constantly.


Honestly, I know of no one here in Europe who has ever been audited for their US returns. (Then again, I'm not the most social person in Europe by a long shot! <g> And most of my friends are in the lower tax brackets anyhow.) Back until about 5 or 10 years ago there were IRS offices here in the Consulates in London, Paris and (I think) Frankfurt. But those were mostly charged with answering questions and helping folks with their US taxes. And oddly enough, although the offices were understaffed and overworked, they were amazingly helpful to lots of folks, including making appearances at various expat organization functions to explain the tax rules and how and when to ask for help. But those overseas IRS offices are no longer - because the IRS in the US is even more understaffed, underfunded and dreadfully overworked, so everyone in the "luxury" posts was called back home where they aren't allowed to be helpful to commoners.

It used to be the case that every individual with over a certain amount of income (several millions at least) would be subject to at least a "review" of their tax returns every year - and some obviously subjected to a complete audit. I recently saw that this practice is now only applied to 20 - 40% of the returns of the richest individuals. For "normal folks" you're very unlikely to get audited unless there is something noteworthy about your return - like a sudden jump in income, a multitude of math errors on the return you do file or something else that hints that you may be hiding something or at least in a position to owe considerably more tax than what you have shown on your return. Overseas, the odds are considerably reduced, simply because they are pretty much limited to "auditing" by postal mail or by e-mail.



> Lastly, do you do expat taxes for people...


No. US taxes are one of those things where you have to decide for yourself where you wish to draw the line between strict adherence to "the rules" and putting in a "good faith effort" that simply proves the point about your not owing them anything. (Or, whether or not to report anything at all.)


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## Moulard (Feb 3, 2017)

You may find, that depending on your personal circumstances, even if a free-file provider supports the forms you need, there will be other hurdles....

The IRS have required providers to introduce two factor authentication. This is a good thing, however several of them (by reports and personal experience) require a US phone number

If, due to your circumstances you cannot free-file and required to pay to e-file some providers will only accept a US credit card.

So before going too far down the rabbit hole... do your homework with your selected provider make sure you aren't going to get blocked by those limitations.

Not a endorsement as such but OLT will allow you to register without a US Phone Number (account creation makes it look like it is required, but it is not) and will support paypal if you don't have a US credit card. I started using them after I could not continue using my preferred provider for reasons above. Their interface is not as polished as some of the big providers but that would be my only criticism.




kellybrassano said:


> in your opinion and experience how often do average joe's overseas get audited on their tax returns?


I did an analysis of this from data published in the 2018 tax yearbook. It is impossible to say for sure because the definition of international is not consistent across the various tax tables. 

Anecdotally, I know of tax preparers who state that they have NEVER had an audit of ANY of their clients in a 20 year working life.

It is worth noting that in addition to incomes in excess of 500k USD there is an uptick in audits of low income earners. 

The IRS, has for example, publicly stated that an area of audit focus is returns claiming the EITC ... So.. if for example you claimed the EITC, AND filed Form 2555 it is likely to get picked up and examined.


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## Bevdeforges (Nov 16, 2007)

Moulard said:


> So.. if for example you claimed the EITC, AND filed Form 2555 it is likely to get picked up and examined.


Which makes sense because the EITC requires that the taxpayer have EARNED income, whereas the FEIE (form 2555) is how one formally excludes (only) their earned income from taxation. So technically, that's either a big mistake or evidence of someone trying to fiddle the system. (You can't use the FEIE on only part of your salary - in order to leave enough taxable income to qualify for the EITC or some other earned income based benefit.)

Remember, too, that the IRS has little or no (mostly "no") visibility into foreign sourced income. There is some question as to whether or not they'll start receiving more detailed bank information for those foreign accounts identified as being held by a "US person" - but for now the only information they receive on these accounts is the year-end balance and so far it doesn't look like they do much with that information except perhaps in the case of those with very large balances (like in the millions).


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