ATTN TAX PROFESSIONALS: What is the best way to file US income taxes from overseas?

Question

I was delaying my move date till February so I could file before I go, but is there a way to get W2's online and file online? I can buy and install H&R Block's Tax Cut which will allow me to prepare my own taxes and e-file, but my main concern is getting my W2's. I don't want to risk having them sent to an international address for obvious reasons (unreliable mail service, slow delivery, lost mail, etc...)

Also, what are the requirements for filing taxes in subsequent years in which no income is earned in the Unites States. I am planning to live and work overseas for at least 5 or more years.

Answer 1

Unless you're moving to a third-world nation you'll probably discover that the mail service is actually MORE dependable and reliable than it is here in the US. Just have your W-2s forwarded. Unless your employer makes them available on line there's no way to get them that way.

You are subject to US taxation on your world wide income so you will have to file your returns while overseas. You can e-file from anywhere you can get an internet connection or you can file paper returns. Oddly you will not be able to purchase US tax software overseas even via download. And most US based vendors will not ship it overseas due to copyright restrictions imposed by most of the software publishers. You'll probably have to have someone send you the software or pick it up on a US visit. (This was an extreme sore spot when I was a GI stationed overseas. We couldn't even get it in the military Exchanges.)

The rules on foreign earned income are complex. Get a copy of IRS Pub 54 from their website to familiarize yourself with them. Generally you can exclude a portion of your foreign earned income ($82,400 for 2007 I believe) from US tax OR take a credit against your US tax liability for the foreign income taxes paid. You cannot do both, however, so it's usually best to figure both ways and file whichever way is most beneficial to you.

Answer 2

If you stop working for the employer before the end of the year, you can get the W-2's early by requesting them 30 days before you need them. You only have to wait until the regular date if you remain with that employer until the end of the year. Although this provision is rarely invoked, the instructions for the 2007 W-2 say:

"If an employee asks for Form W-2, give him or her the completed copies within 30 days of the request or within 30 days of the final wage payment, whichever is later."