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The tax deduction for non-resident Americans is, of course, a little more complicated than the article suggests. With the disclaimer that I'm not a tax professi

The tax deduction for non-resident Americans is, of course, a little more complicated than the article suggests. With the disclaimer that I'm not a tax professional and this isn't tax advice, there are two options: for income up to some threshold (around 120k) it can be "excluded," basically a deduction on your AGI, with anything above that threshold taxed at the higher bracket; the other option is to basically treat taxes paid to foreign governments as a tax credit (with no threshold). If you're lucky enough to be in the second group, it means you need to file your foreign taxes before the US ones to end up knowing how much you pay. The fun twist: many countries in Europe have a tax system that doesn't assume everyone pays TurboTax, so actually filing is somewhat unusual, and basically impossible to do before 15 April. To find a European tax professional isn't always easy, and if you tell them you're an American they often back off, knowing your case is nightmarishly difficult. And if you do pay some US taxes still (e.g. capital gains on stocks still in a US account) then you're required to at least declare it on your European tax statement -- which itself must be submitted before you know how much US taxes you pay. The pool of recursion-ready tax advisors is unfortunately very small, and US citizens living abroad suffer for it. As a US citizen living abroad, I think it's still preferable though.

tzs 4y ago
> If you're lucky enough to be in the second group, it means you need to file your foreign taxes before the US ones to end up knowing how much you pay. [...] so actually filing is somewhat unusual, and basically impossible to do before 15 April. Would this work? File in the US for an extension on filing. That gives you until October 15 to file. That doesn't give you an extension on paying, so by April 15th make an advanced payment of either what your US taxes would be without the foreign tax credit, or if you can reasonably make a conservative estimate your foreign taxes what you US taxes would be with that as your foreign tax. After you know for sure your foreign tax you can do your US taxes and get back however much you overpaid with your advanced payment. I suppose you could also file by April 15th without an advanced payment and without claiming the foreign tax credit, and then file an amended return after you do your foreign taxes to get back the overpayment.
- anaisbetts 4y ago
  It works great, except that you must pay your estimated tax debt in full when you make an extension. This means you will pay double taxes, then wait on the US government to refund the money that you floated them. Because of the current IRS mess, this can easily take 6mo+ or more.

tzs 4y ago

> If you're lucky enough to be in the second group, it means you need to file your foreign taxes before the US ones to end up knowing how much you pay. [...] so actually filing is somewhat unusual, and basically impossible to do before 15 April. Would this work? File in the US for an extension on filing. That gives you until October 15 to file. That doesn't give you an extension on paying, so by April 15th make an advanced payment of either what your US taxes would be without the foreign tax credit, or if you can reasonably make a conservative estimate your foreign taxes what you US taxes would be with that as your foreign tax. After you know for sure your foreign tax you can do your US taxes and get back however much you overpaid with your advanced payment. I suppose you could also file by April 15th without an advanced payment and without claiming the foreign tax credit, and then file an amended return after you do your foreign taxes to get back the overpayment.

anaisbetts 4y ago
It works great, except that you must pay your estimated tax debt in full when you make an extension. This means you will pay double taxes, then wait on the US government to refund the money that you floated them. Because of the current IRS mess, this can easily take 6mo+ or more.