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American Expat Taxes

When it comes to taxes, especially the less common expatriate tax issues, the easy way can quickly become the hard way. The most common simplified tax preparation methods are the popular mass-market tax programs. And while tax software does work well for most people, these programs are simply not equipped to handle all of the overseas issues relevant to expatriates. Going to a chain tax business while back home in the U.S. may only be one step above the software, though, as the employees at these chains are usually unfamiliar with expatriate exclusions and other issues.

Expatriate teachers may feel that their only real option is to simply put off paying their taxes. Unpaid taxes are a constant source of worry and weight, however, making this the least desirable of all choices. Many of our clients have put off their taxes for years (of course, one year turns into two and two into five). Tax software and tax chain employees will prove useless in these situations. Only a true and specifically trained professional can dig someone out of this kind of back taxes hole. The good news, though, is that it can be done....and more easily than you might think.

The Better Way

If you are working overseas, there are professionals who do specialize in overseas laws and expatriate tax issues who can guide you in preparing your tax forms. At Taxes for Expats, we can ease your worries, save you money, return you the IRS's good graces, and handle all your tax matters with superior knowledge of your very unique situation. As an expatriate, if you file your taxes without knowledge of the special exclusions, you may overpay by thousands. We're here to help you avoid that. There are important things to know before filing your taxes as an overseas teacher, though, whether or not you choose to have your forms prepared and filed by an expert.

Filing Deadlines

First, as a U.S. citizen, you are used to filing your taxes by April 15th. This is a good rule to follow; because, as an expat, your taxes are still owed by that day. The date to file, however, is actually June 15th for expats (two more months to file, no more time to pay). For your first year overseas, you will probably need an extension (past June fifteenth) to be able to qualify for the Foreign Earned Income Exclusion (for which you definitely want to qualify). You should file your extension request by June fifteenth. Also, note that tuition breaks for your kids (although they enhance your income) are not taxable income. Housing benefits, however, are usually considered taxable.

Avoid Mistakes. Hire the Expat Expert.

Although we strongly advise against it, if you do decide to prepare your tax forms on your own (or without the help of a specifically trained expatriate tax expert), study, study, study beforehand. In order to claim the Foreign Earned Income Exclusion, you will have to specifically prove that you qualify for it. Many of our clients come to us after having been turned down for the claimed exclusion.

Simply put, the IRS is not going to sacrifice all of your tax dollars without making the exclusion a little difficult to navigate. In a matter of minutes, we can glance at your forms and determine where you have made mistakes (which will cost you the exclusion). Unanswered questions (because you simply do not know the answers), will, in most cases, cause the IRS to deny you the Foreign Earned Income Exclusion. Once denied, we can file an amendment to fix the problem. Of course, it is better to simply have your forms prepared accurately, and completely, the first time.


Even though you may be current with the filing of your tax returns - you may have overlooked something extremely important:  FBAR (Foreign Bank and Financial Accounts). FBAR must be reported on Form TD 90-22.1 if the aggregate total of all international accounts equals or exceeds $10,000 AT ANY POINT throughout the taxable year.  Failure to abide by FBAR filing requirements has steep consequences with the IRS, and claiming ignorance only helps so much.  Non-willful FBAR violators (those who accidentally file inappropriately or who was not aware of the need to file, etc) may be charged up to $10K, and willful violators will be charged either $100K or 50% of the balance of their combined accounts - whichever number is greater.

Another measure to prevent international tax evasion which was taken by the US in 2010 is the Foreign Accounts Compliance Act (FATCA), through which overseas financial institutions report information to the US on all accounts held by American Citizens.  In recent months the United States has been working to extend its agreement with more European countries and is planning to enact an agreement with as many international locations as possible.

FATCA - Form 8938

Updated FATCA rules state that an American Citizen who is either regarded as a foreign resident for the complete tax year or who meets the physical presence test requirements for residing in a country overseas is required to file the new Form 8938 if any of the following apply:


  • If you are single: Total combined foreign accounts totaled or exceeded $300K at any point throughout the year OR total combined foreign accounts totaled or exceeded $200K at the end of the taxable year.
  • If you are married and filing jointly: Total combined foreign accounts totaled or exceeded $600K at any point throughout the year OR total combined foreign accounts totaled or exceeded $400K on the last day of the taxable year.

Below we include information on the Greek Tax System for the American Expatriates.

Personal income tax rates in Greece are progressive up to 40%.


Tax scale for 2010:

Income bracket Tax rate Tax per bracket Aggregate tax
First 10,500 Exempt 0 0
Next 1,500 15% 225 225
Next 18,000 27% 4,860 5,085
Next 45,000 27% 4,860 5,085
Exceeding 75,000 40%    



For income earned by employees, the first bracket is increased by EUR 1 500 (therefore the second bracket is no longer applicable).