It begins with the feeling of freedom. Freedom from the constraints of the West. The long winters. The corporate drudgery. But as the months pass and each year arcs back toward April, the feeling of freedom turns into the grim reminder that no matter how far we fling ourselves from America, we are prisoners of the IRS.
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We have this joke back home—us Americans—that only two things in life are certain: death and taxes. When I first moved to Thailand I was much less experienced and much more ignorant to how things worked in the country. I assumed that because I didn’t live in America anymore, I wouldn’t have to file taxes. I never took into consideration that I’d still be at the mercy of the IRS while living in Thailand.
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Before I get into how I file my taxes, it’s best to give a little background info on who I am. I moved to Thailand full-time in 2014 with my wife and our first daughter. Since then we’ve had another daughter who was born in Thailand. I’ve had a marriage visa since 2014. Over the years I’ve taught English and freelanced as a writer and editor for companies and individuals outside of Thailand. Each year, I have to pay taxes in Thailand on my teaching salary, and I have to pay taxes in America on my freelance income and other investment related stuff.
When I first moved to Thailand, I wasn’t sure if I had to file taxes. So I got in touch with my accountant back home. He told me that indeed I must file state and federal taxes while living abroad. In some cases, you don’t have pay state taxes while living abroad, especially if you live in a state with no state tax, like Nevada. But in my case, I last lived in New Jersey. So I still had to file.
What would happen if I didn’t? He told me I could have my passport revoked or be denied renewal.
My accountant then told me a story about his client, an American expat who moved to Spain and opened a restaurant. The American expat met a Spanish lady, got married, and then sold his business and wanted to bring his wife back to America with him.
My accountant told me his client hadn’t filed taxes for nine years. NINE YEARS. And the US Government wasn’t pleased. My accountant didn’t tell me outright how much the IRS wanted from his client before they would let him and his wife into the states. But he didn’t have to. The tone of his email said it all.
Here’s a list of other penalties you could face if you don’t file your taxes while living or working abroad:
- a tax fine based on your average income of previous years
- freezing or seizing of your bank accounts
- jail or imprisonment for severe cases
So do yourself a favor—file your taxes. Here are some questions that’ll help you determine if you have to file taxes while living in Thailand:
- Do you spend 180 days or more per year in Thailand?
- Have you made a minimum of $10,000 while living in Thailand?
- Do you have at least $10,000 in a Thai bank account?
That last bullet should be carefully considered. Because of Foreign Bank Account Reporting agreements between Thailand and America, all banks in Thailand must report to the IRS how much money expats have in their accounts.
When I file taxes from Thailand, there’s a list of documents I need to send to my accountant. Your case may be different. So be sure to check with your accountant.
In case you’re wondering, aside from the obvious social security numbers of my family members, here’s everything else I send:
- invoices of all non-Thailand earned income for the year
- 1099-B, 1099-DIV, 1099-INT
- FinCEN form 114
I scan and send these documents to my accountant in late February. This works me for because by this time, my tax paperwork for my investment accounts are usually available for download.
Once I scan and gather all my tax forms into a folder on my computer, I transfer a copy of the folder to my accountant. He works his magic and in a day or two, sends my official taxes back to me. I sign them, email them back to him, and he sends them to the state and IRS.
If you’re working in Thailand, you’ll have to file taxes in Thailand as well. Usually, the company you’re working for will assist you with your Thailand taxes.
In short, due to the American-Thailand Tax Treaty, the IRS will tax you on your Thailand-earned income if you make over $101,300 per year in Thailand. That’s about 3,039,000 baht per year. But if you retire here and receive pension from your home country, you might be subject to Thai tax as well. Best to check with your accountant.
Do I expect every American expat who needs tax help to use my tax guy? Nope. And besides, I don’t think he’d appreciate me referring hundreds of people to him right before tax season comes to a close.
But you do have other choices. Here are just a few ways to file your US taxes while living in Thailand.
The IRS has four resources available to help you file your taxes online.
- The Free File Fillable Forms are for people who make $66,000 or less a year.
- Their tax return preparation site is also free for those who qualify.
- The IRS also has commercial software available.
- Or you can file your taxes through an IRS authorized e-file provider.
As mentioned above, I have tried to use the IRS e-file system from Thailand. But I had some issues when uploading my documents. Unless they’ve fixed up the system since 2015, you may run into similar issues.
1040 Abroad is run by American expat Olivier Wagner. He has ten years experience in taxes and helps people from all walks of life in Thailand. Although I’ve never used him for my taxes, a few of Thailand Starter Kit’s readers have. And they’ve had nothing but good things to say about him.
Bright!Tax was founded by expat Gregory Dewald. He has a team of accountants who work under him to expats handle their taxes from Thailand. Although he offers roughly the same services as 1040 Abroad, his service is open to expats from all different countries. So you might not get the same detailed Thailand-tax know-how that you would get with a service like 1040 Abroad.
And if you run a business in Thailand, these three companies can help you.
Bangkok Global Law handles taxes for companies and multinational corporations in Thailand. But they also do personal income tax for expats in Thailand.
The team over at Law Alliance have been in the tax business since 1984. Although they can handle simple expat tax issues, they specialize in filing taxes on foreign investments or for BOI promoted companies.
PKF Tax and Consulting Services, Ltd.
If you’re facing challenges with the Thai Revenue Department, PKF, and especially John Casella, is your go-to service for taxes. They can assist expats with indirect taxes, tax structuring, transfer pricing, and tax due diligence.
Photo courtesy of Sebastiaan ter Burg.
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