For Americans living abroad, preparing or navigating the rules for US taxation in Singapore can be overwhelming and confusing. Even worse, if fail to file as per the US taxation law, it can result in significant penalties or let you pay dual taxation. Nonetheless, when you strategically prepared and filed your taxes correctly, there are huge benefits designed specifically for US expats.
In this article, we will look at the best US expat taxation tips for Americans living or working abroad. It includes tax rates, filing thresholds, exclusions, and more.
2020 Brings New Changes in US Expat Tax Filing Procedure- Monitor the changes
Aside from the challenges involve in filing US tax, the rules and regulations for US expat taxation seem to change daily. Like, expats usually get an automatic 2-month extension period to file their pending US tax return. In 2020 however, with the pandemic outbreak of the coronavirus, the deadline for US expat in Singapore has shifted from April 15 to July 15 by the federal government.
However, it is important to note that in certain circumstances, a further extension until December 15 may be granted for tax filing at the discretion of the IRS. What Is the Minimum Credit Score for A Mortgage in Canada?
Therefore, as a valuable tip, it is recommended to monitor the changes introduced in the provision of US tax in Singapore and also stay updated with the law to avoid dual taxation as well as a hefty penalty.
In the meantime, you can go through below-mentioned last-minute tips for filing American tax in Singapore.
Last-Minute US Expat Tax Filing Tips
- File tax return electronically
You may often get to hear this many times, despite what you have heard, it’s the best way to get your taxes filed appropriately. You don’t need to visit the post office, especially at midnight on the final tax filing day and hope it gets postmarked before midnight. You don’t even need to manually fill out your tax paperwork.
Moreover, the electronic tax filing procedure also means you can get the IRS going on your refund claim more quickly than if they had to go through your paperwork return claim. Also, filing taxes electronically every year makes the next year filing procedure easy as well. You can import all your essential information from the last year’s electronic return into the current year e-tax filing form. It will save your productive time and money as well.
- Collect your document and other essential paperwork together to avoid the mess
While preparing for filing your return, make sure you have everything together before beginning your return for American tax Singapore. Here are some of the important documentation you may require:
- Your personal information, including your social security number
- Income records, including investment property, canceled debt, social security income, Form-1099S, W-2, and so other
- Expense records, including charitable donations, property taxes, medical expenses, and childcare costs, and business expenses like travel, equipment, and supplies.
- Efficient use of specific tax benefits
You may need to understand that the provisions of USA tax in Singapore for expats are different in many ways from the tax returns you may have filed while living in the US. While filing expats tax returns in Singapore, you are entitled to avoid double taxation and lower taxes by claiming credits and exclusions, such as:
- Excluding income from taxation report with Foreign Earned Income Exclusion (FEIE).
- Claiming the Foreign Housing Exclusion to lower the living expenses
- Offset tax paid to other countries by applying the Foreign Tax Credit (FTC).
Through these exclusions, deductions, and credits, you can reduce or even eliminate your US tax burden.
Living abroad can be exciting, but at the same time gets complicated when the expat tax filing deadline approaches you. However, US expats living in Singapore can potentially take advantage of significant tax benefits, when they seek the information- regarding what tax provisions apply to them.
This guide to US expat tax tips gives you an overview of how to overcome the overwhelming tax filing process like a US expat tax pro.
