Expert US tax preparation for Americans in Germany
The Local · 3 Mar 2015, 14:07
Published: 03 Mar 2015 14:07 GMT+01:00
Company name: Greenback Expat Tax Services
Name of Interviewee: David McKeegan, Co-Founder
Who is Greenback?
Greenback specializes in providing expert expat tax preparation and services for Americans living around the world. My wife, Carrie and I, started the company back in 2008. We were expats ourselves and couldn’t find an affordable, experienced expat tax provider so we decided to create the kind of company we were looking for. We’ve grown exponentially since our inception and now serve clients in over 140 countries—it’s an exciting time for our company!
Where is Greenback located?
Greenback actually operates with a unique business structure. Our entire team works remotely, without a physical office. Like us, many of our team members are expats themselves!
We wanted to remain location independent since we really enjoy the expat lifestyle, but operating virtually also allows us to find the most experienced accountant and management professionals, no matter where the live.
What are Greenback’s greatest strengths?
We certainly believe the expertise of our accountant team is the core of this company. Providing accurate returns is critical and we are meticulous in our hiring process. Customer service is another strength. Many clients return to us year after year for our tax expertise, but also because we are genuinely nice people to work with. That is the ultimate compliment.
Why would a US expat choose to work with an expat tax company instead of preparing their taxes on their own?
Expats can absolutely file on their own if they are comfortable doing so! But the US expat tax filing requirements are complex and ever-changing, which makes it really difficult for expats to accurately file their taxes year-to-year. Understanding the deductions and exclusions that are available to offset US taxes can also be a challenge so it’s helpful to work with someone who knows the ins and outs of expat tax filing.
What is the biggest tax issue Americans in Germany face?
Americans in Germany may be surprised by the high tax rate for higher income earners. However, expats may be able to use the Foreign Tax Credit (FTC) to offset their US tax liability as a result. The FTC is a dollar for dollar credit against tax paid to Germany and it may be very useful. For example, if you paid $35,000 in taxes to Germany and your US tax liability was $28,000, you could choose not to use the Foreign Earned Income Exclusion and only use the Foreign Tax Credit. Not only would you eliminate your US tax liability (because you paid more in taxes to Germany than you would to the US), but you’d then have a carryover of $7,000 to use against your US taxes in future years!
Do you file foreign bank account reports for your clients?
Yes! We prepare and file both FBAR (Foreign Bank Account Report) and FATCA (Foreign Account Tax Compliance Act) forms. We file the FBAR form (FinCEN 114) electronically with the Department of the Treasury by June 30th each year, while FATCA Form 8938 is filed along with your US Federal Tax Return. (Remember that if you file for an extension on your US return, you get an extension on FATCA, but NOT FBAR—that is always due June 30th.)
How does the tax preparation process work?
We wanted to make it as simple as possible, so everything is done online. Documents are uploaded to a secure online folder and the accountant prepares a draft return in about a week. In most cases, our accountants can even e-file on behalf of their clients.
What if someone hasn’t filed their US taxes since moving abroad?
This situation is really common, as many expats never knew they needed to file. We can help by filing back taxes, as well as prepare the necessary forms and tax returns if someone chooses to file under one of the IRS amnesty programs for delinquent filers, such as the Streamlined Filing Procedures.
This text was sponsored by Greenback Expat Tax Services.