With remote work and digital nomad lifestyles on the rise, there has never been a greater number of American expats living and working abroad. For all of the benefits the lifestyle offers from adventure and freedom to business opportunities, the one common challenge faced by many is that it can be decidedly complex to file your taxes. MyExpatTaxes, emerged as a startup in 2018 seeking to solve that problem and has since become the leading tax filing platform for expats.
It’s co-founder, Nathalie Goldstein, actually started the company out of necessity as an American expat herself who relocated from California to Vienna, Austria. As a young founder who has successfully scaled her startup into one of the fastest-growing fintech companies in the tax space, we caught up with her for insight into what the growing number of millennial expats and digital nomads need to know to keep their finances in check overseas.
How did the idea for MyExpatTaxes come about?
Nathalie Goldstein: The idea originated when I moved abroad from Silicon Valley to Vienna, Austria in 2015. I ended up hiring a tax consultant from one of the top tax firms for about $500 just to file my returns. That’s when I took it upon myself to develop a solution to a problem 9+ million American expats face. I ended up being MyExpatTaxes‘ first customer.
MyExpatTaxes was the missing piece to the Expat Tax Market. A fast way to file online, no matter how complicated your tax profile is. Being the only ones in the market that are not an accounting-based firm, and the thought process behind the MyExpatTaxes software is “think like a user, not an accountant”. The automation allows for affordable and smart tax filing. This is what has led to MyExpatTaxes 10x year-over-year growth, and to submit thousands of tax cases accurately for US expats in over 170 countries.
What made MyExpatTaxes different from existing solutions?
NG: As MyExpatTaxes only serves Americans Abroad, we can focus on their specific unique filing needs, enabling 100% accuracy. Filing as a US expat can be extremely confusing, this is why many Americans are not aware of the annual filing requirements with the IRS or the refunds they are eligible for. Often refunds for expats are missed by other tax firms. MyExpatTaxes is unique in the fact that our software can identify these refunds based on our smart questionnaire. This is why we can guarantee the highest tax refund.
Also, the automation makes it significantly faster, and less expensive to file. As expats, we know people want a fast and easy way to file their tax return, not to talk to a tax professional for months.
Because many Americans Abroad are unaware they need to file, they end up putting themselves at risk penalties and fees and often will need to catch up using the IRS Amnesty Program. The Streamlined Filing Offshore Procedure Program normally starts at $2,000 and can take months to complete through a traditional expat tax firm. With our patent-pending tax software, non-compliant taxpayers can easily file the 3 years of tax returns and 6 years of FBARs in as little as one day for 1/3 of the price. To date, MyExpatTaxes has had a 100% success rate with all the Streamlined Applications submitted to the IRS.
Why has the expat market been so under-served when it comes to tax filing?
NG: Many people are likely unaware that there are roughly 9 million Americans living abroad and many of those expats need to file an annual tax return to the IRS– it’s also not as simple as a tax return for an American living stateside.
The popular US-based tax firms and tax software programs tend to only focus on Americans living and working in the states. This results in inaccurate returns for expats due to the massive differences in the tax reporting approaches. Diving into the US Expat Tax laws can be daunting, which is why often Americans abroad are underserved. Among the various boutique firms that do specialize in US Expat Taxes, the labor and expertise involved in just creating a return is so high that the starting fee for a simple Federal Return is usually around $500. This is about 10x what an American living stateside would pay for the same tax return, which makes absolutely no sense. Fortunately, we have looked to make US Expat Taxes easy, fast, affordable and most importantly accurate.
The other issue is around electronically filing for expats in general. Most US commercial tax software programs usually require expats to paper mail their tax returns to the IRS. This leads to delays due to international mailing services, which expats really saw when the pandemic started. MyExpatTaxes works directly with the IRS to electronically file tax returns though, which is why we allow the majority of US Expats to eFile regardless of how complex their return is.
What are the biggest tax mistakes expats make when working abroad?
NG: Most expats are not tax compliant with the IRS and FATCA regulations, simply because they are unaware of them. This is especially a big issue for those married to non-US Citizens, who tend to file as Married Filing Separately since the filing threshold for them is a measly 5 US Dollars.
The IRS Streamlined Procedure could be used to avoid failure-to-file and failure-to-pay penalties. While this process can be fairly complex, our tax software makes it easy for any expat to become tax compliant, even if they have never filed before.
Because expat tax laws can be confusing, picking the right expat tax service is important. For example, expats need to make sure they pick a service that covers all FATCA Regulations in addition to tax law, to avoid facing a $10,000 per year penalty from the IRS. The filing thresholds for these forms differ from year to year, to make sure your service is always up-to-date with these laws.