Filing Frustrations: The Struggle Is Real For Self-Preparing Expats
04 July 2025
5 Mins Read
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Tax season isn’t merely a hassle for U.S. expats in the UK or Australia. Hence, it’s a muddled, paperwork-filled, emotionally draining ordeal, particularly if you’re attempting to do it yourself.
You assumed you could save yourself some cash by forgoing a tax expert. You’ve prepared your taxes in the past, I believe. How difficult can it be?
Well. Then, the paperwork began to add up. You searched for acronyms such as FEIE, FBAR, and PFIC on Google, only to tumble down an abyss of IRS terminology and ancient forums.
If this sounds familiar, you’re not alone. Here’s what the self-filing experience really looks like for U.S. expats and why it might be time to reconsider doing it solo.
Expat Tax Services helps you to do your taxes fast and with ease. The service takes away the burden from you.
The Story: Meet Amanda, An Expat In London
Amanda relocated from Boston to London in 2021 for a marketing position. She’s enjoying a good income, the pub lifestyle, and a sense of settling in.
Tax time rolls around, and she does her U.S. return herself, just like always.
Hiring the services of expat tax specialists reduces the burden on you.
This year’s return is not the same, though.
- She’s never done Form 2555 before.
- Her UK pension could be a foreign trust.
- She receives some news about having to report her HSBC bank account with a balance greater than US$10,000, but she isn’t sure how.
However, after three evenings spent sitting at home in her pajamas with a bag of coffee as her only companion, Amanda turns in her return, but she’s anxious, wondering if she forgot something and hoping for no IRS letter.
Expat Tax Services helps you to do your taxes in such situations.
Why Self-Filing As An Expat Is So Difficult: Reasons To Take Help From Expat Tax Services
Let’s examine the most significant challenges Americans abroad face when attempting to file on their own.
1. The Forms Aren’t Designed for Expats
Issue: Some tax services work for individuals residing in the U.S., but for expats, most online tools don’t accommodate needed forms such as:
- Form 2555 (Foreign Earned Income Exclusion)
- Form 1116 (Foreign Tax Credit)
- FBAR (Foreign Bank Account Reporting through FinCEN 114)
- Form 8938 (Foreign financial assets under FATCA)
What occurs: Either you can’t file them at all, or you do, but incorrectly.
Solution: Use expat-specific software or manually file with IRS fillable PDFs (only recommended if you enjoy reading tax code).
2. Double Taxation Concerns Are Legit
Issue: You’re taxed in your host country (UK or AU) and still need to report global income to the U.S.
Why it’s tricky: The tax years don’t align. The currencies vary. The deductions aren’t directly 1:1. Suddenly that freelance Melbourne side hustle becomes cloudy in no time.
Solution: You get to decide whether to use the Foreign Earned Income Exclusion or the Foreign Tax Credit—but if you make the wrong choice, you could end up overpaying.
3. Exchange Rates, Accrual Rules, And Currency Conversions
Issue: The IRS needs your numbers in USD, even though you’ve earned everything in GBP or AUD.
What’s tricky: Do you exchange each paycheck at the daily rate? Use the annual average. What if the UK gives you a bulk lump sum bonus in April?
The IRS, therefore, allows average annual exchange rates, but certain income types may require exact conversion dates.
Mess that up, and you’re inviting audit risk.
4. Foreign Pensions, Superannuation, And Investment Accounts Are. Complicated
Problem: Your UK pension or Australian super isn’t just retirement savings. To the IRS, it could count as a foreign trust or PFIC (Passive Foreign Investment Company).
What this means:
- Extra forms (like Form 8621)
- Higher tax rates
- Risk of penalty if you don’t file at all
Solution: They can’t do this with most U.S. tax software. Therefore, specialized expat tax expertise is the key here.
5. Deadlines Are Different—But Penalties Are Steep
Problem: Being abroad provides a June 15 IRS deadline, but expats mistakenly believe FBARs are included—it isn’t. That deadline is April 15 anyway.
What’s the Risk? Failure to file the FBAR exposes you to $10,000 per account penalties—even if it was an accident.
Solution: Use calendar reminders or employ someone who’s familiar with the routine.
6. You Don’t Know What You Don’t Know: Expat Tax Services Will Be The Savior
Issue: You’d be fine filing your return until you discover you forgot something, such as FATCA filing or foreign gift reporting.
What’s typical:
- Missing rental income on a U.S. property
- Overlooking foreign ownership of stocks
- Omitting Form 3520 for foreign inheritance
Solution: Have a professional review your situation at least once. Even once is enough to save you future stress.
Table: Self-Filing Vs. Professional Expat Tax Help
| Feature | Self-Filing | Using a Pro |
|---|---|---|
| Supports expat-specific forms | Rarely | Always |
| Handles foreign pensions | Often misunderstood | Accurately categorized and filed |
| Avoids double taxation | Risk of overpaying | Strategically managed |
| Tracks FBAR & FATCA compliance | Easy to miss | Included in service |
| Personalized advice | None | Yes |
| Cost | Free–low ($0–$100) | Moderate–high ($300–$800+) |
| Peace of mind | Low | High |
FAQs
If you had more than $10,000 (combined) in foreign accounts anytime during the year, you’re required to file FBAR. Failing to do so will result in hefty penalties, even if you owe no tax.
Yes. U.S. citizens are taxed on all income worldwide, even if they live outside the U.S. But you can usually cut or eliminate your U.S. tax through exclusions and credits.
Sometimes. But it varies based on your type of income, home country, and tax treaty. Therefore, a pro can assist you in determining the best path.
If your income is straightforward and below the FEIE threshold (e.g., ~$126,500 in 2024), perhaps. But if you have a pension, investment accounts, or two streams of income, seek assistance.
Things To Keep In Mind Before Doing Your Taxes By Yourself
Filing taxes as a U.S. expat isn’t impossible, but it’s rarely simple. Therefore, if you’ve ever clicked “Submit” on your return while crossing your fingers and hoping for the best, you’re not alone.
The stress, the second-guessing, and the fear of missing something important? That’s the real cost of self-preparing.
Sometimes, the smartest move isn’t DIY; it’s DIFY: Done-It-For-You.
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