You know the feeling?
You’re enjoying another beautiful spring here in Spain, happy to be living abroad…
But then, around the month of March, you start to have the nagging sensation at the back of your mind that you really should be doing something about your US taxes.
You wonder what your obligations really are…
And secretly fear you’ve been doing the whole thing wrong for years.
So you get on TurboTax and (after several days of struggle, confusion and misery) send a huge stack of forms off to the IRS and hope for the best.
If you’re like me and you actually run a business abroad, it’s even worse. More like:
You worry about taxes constantly, 12 months a year. You attack TurboTax in January, experience several (usually 8 to 12) weeks of struggle, confusion, misery, etc and then…
You silently weep at the size of the bill.
If you’re an expat or any kind of digital nomad, staying on the right side of tax laws in multiple countries is difficult, time consuming, and has you constantly worried about what you’re doing wrong.
Fortunately, there is hope.
US taxes in Spain… the bane of an expat’s existence
What exactly is a bane?
According to my dictionary, “something, typically poison, that causes death“.
Which is almost how I feel about navigating the IRS website and the help sections of TurboTax trying to figure out WTF to do with my US tax return.
However, a few years ago I was invited to file my US taxes in Spain with Taxes for Expats. (Full disclosure: I got the service for free because I’m a famous blogger now. Or something.)
Anyway, I’ve personally resisted using an accountant for several years…
Time which I now understand was completely wasted.
I guess I just assumed that an accountant would ask me all sorts of embarrassing questions and somehow make my tax bill worse.
How wrong I was!
I signed up for Taxes for Expats online – the website is taxesforexpats.com – and did their tax questionnaire. Uploaded a few documents and previous year’s returns and sent them off.
The page is fast and easy to use, and the whole thing was much less time-intensive than TurboTax. We’re talking a couple of hours total.
And the best part is, I was assigned an actual accountant who (unlike me) knows what he’s doing.
(Another full disclosure: in his photo on the website, he looked like the kind of accountant you see in films about the Mafia, which I thought was totally awesome. You’ll probably get someone different, though.)
Anyway, the whole thing went much better than I ever could have hoped – my new accountant pointed out some aspects of tax law I never knew existed.
I got a LOT of money back.
And the whole process was done in a few days.
(Turns out, it’s good to have someone on your side who actually understands how to file your taxes abroad.)
Do I have to file US taxes if I live in Spain?
Good question. The most common answer I’ve found is “probably”.
If you make more than about ten thousand bucks a year, you should file.
If your income is over 10k but still low enough (which if you live in Spain as an English teacher or Auxiliar de Conversación, it might be) you probably won’t owe any taxes.
But you should send in your 1040s anyway.
And there are other things you should keep in mind if you’re living abroad. If you have a bank account with more than $10,000 in it, it needs to be reported.
And I believe the new FATCA laws mean that if your foreign assets are over $50,000 you have to declare them too.
Keep in mind that I’m not a tax professional and the law is constantly changing. This information is just a bit of what’s publicly available on the IRS.gov website, and the whole thing can get very complex.
So please, please, please consult a professional for your serious doubts – if you get audited, “I read it on some guy’s blog” isn’t going to help you.
That’s why you might need help filing your US taxes from abroad
Ask me how I know…
I’ve been struggling with filing my US taxes here in Spain for years now, and this experience, with help, is the easiest it’s ever been.
So for good advice from serious professionals, get in touch with Taxes for Expats today. (There’s a discount of $25 if you use that link right there.)
If you’re looking for a quick, easy way to file your US taxes in Spain, you can’t go wrong.
In the end, I’m getting money back this year.
It’s a tax season miracle!
P.S. While being an entrepreneur and digital nomad who earns passive income sounds sort of cool and Jamesbondish, there are some downsides too. Tax problems. Legal issues. Lots of stuff they don’t teach you in any $120,000 MBA program.
P.P.S. Ok, ok, who am I kidding? I have no idea what they teach in an MBA program. I’m just a guy who makes stuff, not an official, licensed “businessman” with a 6-figure debt to pay off.
P.P.P.S. How are you dealing with your US taxes in Spain? Let me know, right here in the comments… Thanks!