3 ways to quickly file your US taxes from Germany

When it comes to filing your US taxes from Germany, efficiency is key. Here are the top three ways to ensure that your tax filing process is quick and hassle-free. Nathalie Goldstein from MyExpatTaxes brings you this article, tailored to the needs of US expats living in Germany.

It's almost time to start thinking about filing your US tax return. As an expat living in Germany, what are the quickest and easiest ways to get this done? Here are three tips to help you fulfil your tax obligations to the IRS:

1. Consult with a specialised expat tax firm

When it comes to filing your taxes as a US citizen in Germany, the quickest and most reliable route is through an online tax service which specialises in expat taxes. Why opt for a company tailored to expat needs? For starters, specialised companies are well-versed in the unique benefits available to US expats.

Forms that could be overlooked by companies not specialised in expat taxes include Foreign Tax Credits or Foreign Earned Income Exclusion:

• Foreign Earned Income Exclusion (FEIE): The FEIE allows eligible US taxpayers living and working abroad to exclude a certain amount of their foreign earned income from US taxation.
• Foreign Tax Credits (FTC): FTC allows taxpayers to offset taxes paid to foreign governments against their US tax liability.

Not only do expats face different tax benefits, but they also have different deadlines to contend with. While the standard US tax deadline is April 15, expats receive an automatic two-month extension until June 15. Further extensions until October 15 or December 15 are also available if needed.

Apart from tax returns, as a US expat there are requirements that are still essential for living abroad, such as managing foreign bank accounts. The Foreign Bank Account Report (FBAR) mandates that all foreign financial accounts must be reported if the combined max balance of said accounts surpasses $10.000 at any point during the year. While not directly linked to your tax returns, if an expat does not file an FBAR when required, they could face serious consequences.

This is why it is highly advisable to file with a tax company, which understands your needs as a US citizen living abroad.

2. File a digital tax return

Thankfully, you do not have to file your US taxes physically. In fact, you can file them from anywhere! While traditional mailing is still an option, the process takes forever - making the wait time extra lengthy. If you want to make it quick and easy, e-filing is the way to go. Luckily, there are companies which offer a step-by-step process to allow you to fill out all the necessary documents.

If you e-file your US taxes, your tax return will be filed and processed much faster than any paper trail. E-filing your US taxes ensures faster processing and receipt of any refunds, including those like the Child Tax Credit. Refunds are typically directly deposited into your bank account within weeks. Additionally, built-in error software enhances accuracy, minimising delays and reducing the risk of penalties while ensuring you receive the correct refund amount, if eligible.

The benefits of e-filing

If you have ever had to worry about your paperwork not getting to where it needs to be - worry no more. When you e-file, the IRS sends you a confirmation that they have received your tax return. Plus, when it comes to e-filing, it's an added bonus that this information is always encrypted, ensuring the safety of your personal information.

Furthermore, e-filing is more environmentally friendly because you're helping to eliminate paper waste. By choosing e-filing, not only do you streamline the tax process, but you also play a part in preserving natural resources.

Keep in mind, however, that not all online tax software allows expats to e-file from outside of the US. That is why you should make sure to choose one that is catered to US expats specifically and supports all the forms that you need.

3. Keep track of your financial documents

It may seem like a straightforward process, but keeping on top of your financial documents throughout the year is important in order to lessen the burden of filing. Make sure you collect all the necessary documents related to banking, investing, your income, deductions, credit and any and all US employer documents.

Making sure all your documents are where they should be is not the end of the organisational planning. It is good practice to also review your sources of income: wages, self-employment income, rental income, investment income and more. Make sure that it all makes sense, because it will help when you are staring at your bank account statements.

Being aware of how your taxes are going to look can also give you peace of mind. Say you know all about the tax treaty with your country of residence and you know to use the FEIE. Great! Now, you know your options and the path you want to go down, making the process much faster.

File your US tax return on time

Finally, when it comes to making sure that you file your tax return on time, be sure to set reminders and put them in your calendar. Perhaps follow some expat tax companies on social media, so that you are constantly seeing their reminders to file. Be mindful throughout the tax preparation process, as it will save you time and money, and help you avoid unnecessary late penalties.

Want to get more information on how to have a fast and easy tax-filing process as a US expat in Germany? Luckily for you, you can put all your questions to MyExpatTaxes at the IamExpat Fair at the Estrel Hotel in Berlin on June 8, 2024, from 10am - 5pm. Don't worry, there's more to learn there than just taxes, but it sure helps to go through all your expat tax questions with specialists!