Help me find an expat accountant
August 21, 2013 6:18 PM   Subscribe

I recently moved from the U.S. to Melbourne, Australia, and I have some questions regarding taxes and accountants.

I know the U.S. requires that I file a tax return every year regardless of where I’m living. I’m living in Australia on a permanent resident visa (I moved here in May of this year). This will likely make my whole tax situation more complicated than I’d feel comfortable dealing with, so I’d definitely like to hire an accountant to help me file both U.S. and Australian taxes, among other things. I’ve never hired an accountant for any reason so I have a bunch of questions. I guess this is sort of the Australian version of this question, and I've seen this question but am seeking a bit more info I guess.

Should I look for an accountant or tax preparer in Australia who specialises in U.S. expat taxes, or should I try to find an accountant in the U.S. that knows the Australian tax system? Would it be better to deal with two separate people instead, one for the U.S. and one for Australia? Do I even need someone to help me with the Australian taxes for that matter?

What about online tax services? Are they worth using for this? My taxes aren’t terribly complicated outside of the whole expat situation, and I’ve used TurboTax in the past.

I would also like advice regarding my U.S. 401k and what to do with it now that I no longer contribute to it and plan on living in Australia permanently. I really am kind of clueless about this sort of thing. Would an accountant help me with these things as well or do I need a “financial planner?”

Finally, and maybe most importantly, does anyone happen to have a recommendation for an accountant, preferably in Melbourne, that deals with U.S. expat taxes? Preferably someone that isn't too expensive.

posted by milkcrateman to Work & Money (6 answers total) 4 users marked this as a favorite
Best answer: Fellow expat here (I'm actually a dual citizen now). I would think it would be easier to go to a local accountant because you can bring all your stuff. You can talk to one, see what they can do, then decide if you need two separate people or not.

You won't be able to do online US tax because by definition now you have to do the complicated thing which requires filling out form 2555 (or 2555-EZ) which is foreign income exemption or something. Basically, you pay tax in Australia so you don't have to pay tax on it in the US as well. As far as I know, you can't do that online. Though if I'm wrong, please tell me, it would make life easier!

I'd contact your 401k provider and ask them if you can cash it in early due to your living arrangements etc. They may let you. Though that would be a lump sum of income which you may be better off leaving alone until later because you will be taxed more highly on a lump sum. I will face this dilemma eventually myself since my dad set up an IRA for me which honestly I suspect will be more trouble than it's worth.

Recommendations, via the US Embassy website.

Good luck!
posted by Athanassiel at 7:02 PM on August 21, 2013 [1 favorite]

Best answer: I'm a US expat living full-time abroad. I use TurboTax with no problems; it takes care of the Foreign Earned Income exemption. It asks lots of detailed questions about when you arrived in the US for a visit, when you left, *dates on which you passed over US airspace,* etc. to make sure you spent less than 30 days in the US in the last 12 months.

Since you moved to Australia in May, you'll qualify for the foreign earned exemption in May of 2014 because you will have spent 12 continuous months living outside the US. The cool thing is that as an expat you have until June 15 to file for 2013, so you'll qualify for the exemption when you file.

If I remember right from my first year as an expat, for 2013 you'll only owe taxes for roughly one-third of the year's earned income, representing Jan-April when you were still living in the US, because by the time you file in June you'll be officially a non-resident. I might not be remembering right, so you might want to closely read the IRS stuff on the 12-month way to get foreign residence for tax purposes. I do remember that the 12 months can start with any month; it's not a calendar year.

With all that said, an accountant is still a good idea for the first year, especially since you might have some sort of responsibility for Oz taxes. I've heard some good things about Greenback tax services, who specialize in expats. I haven't used them myself.
posted by ceiba at 7:44 PM on August 21, 2013

you could just leave your 401k alone. theres usually a tax treaty that will permit it to grow tax deferred until you're eligible for penalty free distributions.

one note: be sure to file your fbars, and be careful about investing. foreign investments can really be tricky for the US side of taxes. if you stick with stocks and bonds you should be ok, but getting into non-US mutual funds, ETFs, and hedge funds can cause a lot of tax ugliness.
posted by jpe at 8:26 PM on August 21, 2013

Best answer: My wife and I moved from Ithaca, NY to Sydney in 2006. I was on a 457 and then (briefly) a permanent resident visa. We moved back to NY in 2009 for various complicated (unexpected) reasons.

We actually had an accountant in Ithaca. We set that up before we left, because we expected that taxes would be complicated (I am not a US citizen, my wife is, she owned a house in the US, we were going to rent it out, and we anticipated that income earned on two continents would make life harder). The accountants in Ithaca worked with a partner firm in Sydney (Sothertons, it used to be, although when we left they were undergoing reorganization) and handled filing extensions for US taxes to handle the 6-month offset in tax year definitions (ugh) and imputing US and Australian incomes and credits for taxes paid to the right tax years in each country.

I think you should start by talking to an accountant in the country where you expect to live long term. If that's Australia, start with a Melbourne firm. Filing US taxes is not so hard, especially if you will not have much US income (assuming here that you're a US citizen), but for the first year or two, I recommend a US accountant anyway. Filing Australian taxes is even easier, but again, until you've sorted out the 6-month tax year offset, you'll need extensions and you'll have to correctly assign income (and credits for paid taxes) to the different tax years.

Once its set up, you should be able to do it yourself, unless you have significant investment income etc. Until that point, accountants in each country would be the best bet.
posted by RedOrGreen at 9:24 PM on August 21, 2013

In my time abroad, I've had an accountant in the US and one in the Netherlands. I'd shopped around and found a small Dutch firm that was willing to take me as a client, and they had a history of working with the American firm, which is how I came to "find" them. Things were complicated for the calendar year in which I moved, and have been relatively straightforward since then, but I've been pleased to know that professionals were taking care of things for me.

Moonorb: A preferred option would be to try and find someone from back in the States who is willing to work with you from a distance.
This is a good point: I've never met my American tax guy. We e-mail a few times a year as things come up and have about 40 minutes of phone calls a year. My Dutch expert and I met once, briefly, at the beginning, and everything else has been easily done electronically.

If this isn't clear or you want the name of my American tax service, feel free to MeMail me.
posted by knile at 2:23 AM on August 22, 2013

Response by poster: Thanks for the great answers, especially the recommendations (I didn't even think to look at the embassy site).
posted by milkcrateman at 11:38 PM on August 22, 2013

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