Taxes are complicated enough in your own country, and moving is stressful as it is. When moving to Switzerland, the last thing you want to deal with as you adjust to expat life is taxes.
“Filing US taxes is confusing enough as a US resident, but as an expat it’s even more complicated,” expat Carrie McKeegan tells The Local. “And it doesn't have to be.”
Carrie and David are an American expat couple who spent a while living in the UK, where they found that taxes were one of the biggest challenges.
“We were very frustrated with the expensive and inaccurate tax preparation we received while living there,” David agrees. “It was our biggest pain point as American expats in the UK.”
Now they help other expats to overcome the same struggle. Rather than buckling under the weight of an expat tax nightmare, they decided to become the solution, and founded Greenback Expat Tax Services.
“We created the kind of company we were looking for,” David explains.
Greenback Expat Tax Services prepares US tax returns for Americans living in Switzerland and around the world,” David says. “We offer a full range of expat tax services, including tax return preparation, foreign bank account reporting and personalized consultations.”
Many of the team members at Greenback are also expats, based all around the world. The company operates in a virtual environment and employees understand the unique challenges that US expats face.
Banking in a foreign country can be a hassle for any type of expat, but an American passport carries its own baggage – which the team at Greenback knows all about from first-hand experience.
Until becoming a resident of Switzerland officially, it may be difficult or impossible to open an account, so David recommends expats leave their US bank accounts open just in case.
“It’s important to research your banking options before you go,” David says. “Thanks to the Foreign Account Tax Compliance Act (FATCA) and the Swiss bank scandal, banking for Americans in Switzerland has become way more challenging,” David explains.
“Some banks will only open American accounts if they involve large sums of money, so I urge you to ask very pointed questions to the bank you are considering,” he adds.
David notes that the IRS pays special attention to American accounts in Swiss banks, and says it’s “extremely important” to be diligent about Foreign Bank Account Reports (FBAR) and FATCA.
“You need to come forward each year and report your bank account balances if they exceed the threshold,” he says. “If the IRS contacts you about your unreported accounts and the accounts are held at one of the Swiss banks the US has been investigating, the penalties could equal 50 percent of the account balance.”
That’s where Greenback comes in.
“Expat taxes are complicated and not just anyone is qualified to prepare them accurately,” David says. “Our accountants know how to save you the most money by taking advantage of every deduction, exclusion and credit you are eligible for.”
“Tax rates may be different in Switzerland than in the US, which could result a US tax liability,” comments David. “Without professional assistance, it’s easy for expats to end up in the dreaded dual-taxation trap.”
In addition, the team is highly experienced in filing foreign bank account reports, helping expats to avoid the stiff penalties that can be assessed for failure to file.
”Don’t take chances doing it on your own,” Carrie pitches in. “The result could be very costly.”
One challenge expats face is finding a qualified tax advisor who truly understands how to file US expat taxes.
“For starters, look for a CPA or IRS Enrolled Agent, as opposed to just a tax preparer,” David says.
“If it is an online company, make sure they have the highest level of secure data encryption to protect the privacy of your personal documents. Lastly, be sure to get an accurate estimate in writing before they start on your taxes.”
With taxes out of the way, expats can focus on settling in to their new lives and enjoying family and new experiences. After all, that's what being an expat is all about – not paperwork.
“We like to tell people to let us handle their taxes so they can get back to their life,” Carrie says. “Why spend time trying to figure out US expat tax laws when you could be strolling along the River Rhine or hiking the trails at the base of the Matterhorn?”
David and Carrie.
This article was produced by The Local in partnership with Greenback Expat Tax Services.