“I am not filing taxes for many times while living as an expat. Am I in any trouble?”

“Can IRS will easily forget my mistake.”

“What if I miss filing Hong Kong US tax being an expat for constant years”

Are these question won’t let you sleep at night and haunt you? Just like any expat, if you are a US resident living abroad and fail to file your tax, you may receive a penalty notice for not filing taxes.

If your earned income exceeds the filing threshold, the IRS requires you to file annually, whether you live in the US or not. In case, you didn’t follow the guideline and failed to file your tax obligations, you will be imposed with a penalty. This penalty could get you in some serious financial issues, if not consider to have USA Tax Services Hong Kong which can protect your interest from paying hefty fines. With specialized expat tax professionals, you can even avail your right to US expats deduction benefits- special reductions or benefits offered to US expats to help reduce your tax obligation.

The post is not intended to scare you, but encourage you to file your taxes on time and with accuracy!

List of Penalties For Not Filing TAXES While Living Abroad

Failure to File

Failed to file taxes while living abroad can send a negative impression to the IRS. Why? Because it is considered as a criminal behavior which imposes a serious penalty over the taxpayer’s shoulders. The penalties and fines for not filing taxes depend on a lot of factors. It can range from 5% of unpaid taxes and escalate up to 25% and imprisonment can also be considered (If IRS investigates and determines that you’re involved in offshore money laundering and tax evasion).

Additionally, the minimum penalty for filing more than 60 days past the filing or extension date is 100% of the unpaid amount or $135 (whichever is smaller).

Failure to Pay

This is the case occur when you file your tax return on time but actually fail to pay it, the penalty you will face is failure-to-pay. The IRS imposes a ½ percent penalty every month for the amount remains unpaid, up to 25% of your total tax owing.

In any month that both the failure-to-file and failure-to-pay penalties apply, the failure-to-file penalty will be lessened by the amount of the failure-to-pay penalty. Also, the IRS is capable of mercy. You will not have to pay either penalty if you can prove just cause for the delay.

Failure To FBAR filing

There are many US expats who are not aware that they are supposed to file the FBAR (stands for “Foreign Bank Account Report”). In this case, US residents living abroad and have the ownership or control of foreign accounts which exceeds the year aggregate value: FBAR filing is required. The penalty for willfully not filing the FBAR can be up to the greater of $100,000 or 50% of the total balance of the foreign accounts

In order to avoid being regarded as a tax defaulter, it is considered wise decision to have US tax advisory Hong Kong, which makes it easy for you to file so you’ll never have to worry about ‘tax-related’ job while living abroad. If you are not filing your tax or fail to file or pay, it’s not too late to correct it!