When it comes to dealing with multiple countries and their financial systems, things can get complicated quickly! Luckily, for individuals there are a few pieces of advice that can be followed to ensure you are prepared and avoid common missteps when dealing with multiple tax systems. One thing that is important to remember is that each individual’s circumstance will be different, depending on your relationship with the countries you are working in and with, how your assets are divided up and managed, and what your retirement plans look like. In this article you will find some great international tax advice for individuals, but to ensure you are setting up the best tax structure for you, we highly recommend speaking with a CPA who specializes in international tax.
“The best international tax advice you will ever receive is from an International Tax CPA Expert who has reviewed your situation thoroughly.“
With that said, let’s dive in! Here are the best pieces of international tax advice for individuals.
#1 – Understand that the Information You Find on the Internet Isn’t Always Going to Be Reliable
Unfortunately, Google and other search engines don’t rank information based on accuracy. It’s much more about popularity. While you might find a helpful article that seems like it has all of the answers, it may just get the most visits or be around the longest (especially when it comes to tax, you want to make sure you are getting the most up-to-date information as possible). What’s more, virtually anyone can put out information on international tax.
You’ll want to look for information from reliable sources—typically established CPA firms that specialize in international tax (sometimes also called cross-border tax). Ideally, make sure the article or information you are reading has been published fairly recently, and it’s always best if the website has a contact form or phone number you can call so that you can verify the information with the people who have put the information out there.
Relying on articles instead of speaking with an expert can be risky, so make sure you are tentative with what information you rely on (especially if you’re finding it online).
#2 – Know That Your Situation is Going to Be Unique
You might think that every cross-border tax situation is the same, but even if the countries involved are the same there are many other factors that impact your scenario. It’s important to know that your situation is going to be absolutely unique.
Here are just a few things that will change the way your CPA will approach your international tax situation:
- Countries Involved (and where you hold citizenship vs. reside/live/work in/sell in)
- What Assets You Have (and which country they are located in)
- Bank Accounts, Investments, Retirement Plans, and Other Assets
- Whether You Have Full Time Employment or are Self Employed
- Your Short-Term and Long-Term Plans
With so many different factors, there are endless combinations of setups, and truthfully, every single client’s situation is unique. Luckily, CPAs who specialize in international tax will have the best and most informed advice for your situation. Remember, it’s easy to take blanket advice as fact, but international tax is sophisticated and every scenario is going to be different.
#3 – Make Sure You Have the Most Up-To-Date Information and Statements on All of Your Financial Assets
No matter where you are at in the process it’s important to gather and keep up-to-date information and statements on all of your financial assets. This information should included latest statements from financial, investment, and retirement accounts, information on property and assessed value, and a list of valued possessions and assets, etc. You’ll also want to denote which assets have relationships with which countries (i.e. if you participate in international e-commerce, make sure you denote which bank account(s) you use and their country of origin).
Having this information up-to-date and tidy will make tax time, quarterly filings, and ongoing accounting much easier.
You will also need this information to show a CPA and to make sure you make the best choice with how you handle cross-border asset management. Even if you’re not ready to hire a CPA, bringing this information to an initial consultation will ensure that you get the most out of your time meeting with a CPA.
No matter where you are at in the process, it is always, ALWAYS the best advice to set up a consultation and have a qualified international tax accountant review your situation.
#4 – Keep All of Your Paperwork, and Make Sure It’s Organized
Just as important as gathering the most up-to-date information on your assets is maintaining records and paperwork and keeping it organized. Dealing with one tax system is stressful enough, and adding others only multiplies that stress! Disorganized paperwork and information can result in underpayment, overpayment, missed assets, and accidentally violating tax code (which gets very expensive!). Your best protection from unexpected fees and fines is to get in the habit of organizing your paperwork AND working with an international tax CPA.
#5 – Book a Consultation with an International Tax CPA BEFORE You Need It
The best international tax advice is the kind you get before you actually need it. You will save yourself tons of extra work and lost hours going down rabbit holes and preparing information you probably won’t end up needing.
Here are some instances where you might need some international tax advice from a CPA:
- You are moving out of your home country
- You plan to acquire assets in another country (i.e. a vacation home, a business, an inheritance)
- You are getting into e-commerce and planning to sell in other countries (often through sites like Amazon, Etsy, and Ebay).
- You are merging assets or lives with a partner who is from another country
No matter what your situation is, if you are going to be impacted by international tax, the best thing you can do for yourself, your financial situation, and your sanity is to book a consultant with a cross-border CPA before your assets are impact. More often than not, when a new client reaches out to us, they’ve already made some big decisions that really impact their tax situation.
#6 – Make Sure You Understand Filing Deadlines
If you are lucky and already working with a professional, you likely won’t have to worry about filing deadlines, but if you are managing your situation on your own, you want to make sure you understand filing deadlines and what is required. In the US, filing deadlines can depend on the type of forms you file and your entity structure. In other countries, it can be even more complicated. Make sure that on January 1st of every year you know and have mapped out your filing deadlines, otherwise you are at great risk for fees, penalties, and delays.
#7 – Be Wary of Scams
Many scams (especially in the US), will involve letters, emails, and calls from nefarious people pretending to representatives from the IRS and other tax organizations. Sometimes they will claim to be missing a form, need to verify your information, or indicate that your refund is on hold. This is a common identity theft scheme, and these criminals have only gotten more and more sophisticated over time. Before you talk to anyone (and especially before you share any information), make sure you know it’s not a scam.
#8 – If Any Tax System Says You Have Errors or Owe, Contact An International Tax CPA Immediately!
Errors can be a tremendous burden emotionally and financially. You might feel fine managing your taxes on your own, but if there are errors it is 100% worth it to contact an expert immediately! The great thing about leaning on an expert is that they will know exactly what the tax regulators are looking for and be able to offer you swift guidance, ultimately giving you the best chance at avoiding bigger fees, fines, and penalties.
#9 – Know That International Tax is Complicated and Open to Interpretation
Not only does international tax vary from person-to-person and circumstance-to-circumstance, the tax strategy can vary from CPA-to-CPA. Tax codes are complicated and incredibly easy to misinterpret, and misinterpretation can lead to over-deducting, over-paying, and even incurring major fines and penalties.
The best international tax advice you can ever receive is from an International Tax CPA Expert who has reviewed your situation specifically.
General advice is certainly helpful, but it’s never going to be a substitute from personalized international tax advice from an expert.
#10 – Know That Our Experts are Here to Help
Our team is devoted to cross-border and international tax, which means we are up-to-date on the latest regulations, trends, and tax strategies when dealing with multiple countries and tax systems. To learn more about how we work, check out our Cross-Border Tax Services, or learn more About Our Team.
Give us a call or book a consultation and we’ll tell you what we tell all of our clients — Don’t Worry, We’ll Get This Taken Care Of. We Are Here to Help!
Now that we’ve walked through the best International Tax Advice for Individuals, let’s review.
- Understand that the Information You Find on the Internet Isn’t Always Going to Be Reliable
- Know That Your Situation is Going to Be Unique
- Make Sure You Have the Most Up-To-Date Information and Statements on All of Your Financial Assets
- Keep All of Your Paperwork, and Make Sure It’s Organized
- Book a Consultation with an International Tax CPA BEFORE You Need It
- Make Sure You Understand Filing Deadlines
- Be Wary of Scams
- If Any Tax System Says You Have Errors or Owe, Contact An International Tax CPA Immediately!
- Know That International Tax is Complicated and Open to Interpretation
- Know That Our Experts are Here to Help!
If you’re ready to book a consultation, contact us today!