Becoming a digital nomad or an expat working remotely and living overseas has become one of the most prominent trends afforded by the internet and digital work. But whether one is an entrepreneur or freelancer working from Bali or a corporate employee relocated to London or Hong Kong, one of the most challenging aspects of working abroad was tax filing. Then the COVID-19 pandemic hit and American expats found themselves scrambling to complete the necessary paperwork to collect their stimulus checks. Many expats found the experience to be marred with delays and uncertainty about how to receive their payment.
A startup that has focused the last few years on making the tax filing experience easier for American expats, MyExpatTaxes, found demand for their software surging as more overseas residents sought help collecting their stimulus. We sat down with MyExpatTaxes co-founder Nathalie Goldstein, an American expat herself, to learn more about what expats should know about tax filing and future stimulus payments.
Can you tell us a little about what MyExpatTaxes does?
Nathalie Goldstein: MyExpatTaxes is the leading U.S. Expat Tax software, guiding Americans living abroad through the U.S. expat tax filing process faster and more affordable than any other competitor in the industry. Incorporating international tax treaties and expat tax benefits, MyExpatTaxes helps expats claim thousands of dollars in refunds that they otherwise wouldn't know they were entitled to. Whether you have a simple and straightforward tax profile to requiring the IRS Amnesty Streamlined Procedure, MyExpatTaxes can make your tax filing accurate, efficient and affordable.
MyExpatTaxes offers a software solution that didn't exist in the expat tax market: file your U.S. taxes online in 30 minutes with the support level that best fits your needs.
This idea stemmed from CEO Nathalie Goldstein when she experienced the U.S. expat tax headache first hand when relocating to Austria. She wanted a system that would allow her to file her taxes online quickly without the hefty cost of an accountants help. This became the core thought process behind the software: "think like the user, not an accountant".
This mindset has driven MyExpatTaxes to grow 10x Year over Year since incorporating in 2018. MyExpatTaxes is currently trusted by thousands of expats in over 170 countries.
Starting at 149 euro for the Do-It-Yourself Tax Software, MyExpatTaxes is the most affordable and accurate tax software out there for U.S Expats.
What are some of the challenges expats face in filing abroad?
NG: U.S. Expats simply are not informed enough of the constantly changing tax laws, since the IRS limits their support for international filers. For starters, the majority of U.S. expats are not aware that they are legally required to file an annual tax return to the IRS regardless of where they work or live.
For example, the American who moves abroad for love usually ends up in the worst situation. Why? A U.S. Expat married to non-U.S. Citizens, would normally need to file as Married Filing Separately, which means that the IRS filing threshold for them is a measly five U.S. Dollars. On top of that, they are not able to utilize common deductions like the student loan interest deduction.
A second challenge or misconception is understanding that U.S. expats are not eligible for U.S. tax benefits if they file a return. U.S. expats should in fact file their annual taxes to claim their due refunds. MyExpatTaxes specializes in claiming thousands in refunds for U.S. Expats including the First and Second Stimulus payments (known as the Recovery Rebate Credit) and the Additional Child Tax Credit. The average U.S. Expat with children will get $1,400 in U.S. refunds using MyExpatTaxes.
On top of this, expats often struggle with getting professional help with U.S. expat tax laws. Often U.S. based tax accountants or the tax software programs are not familiar with the complexity of international tax law. In turn, U.S. expats need to look for a specialized expat tax firm, which comes at hefty fees, starting at $500 a return.
This is why we created MyExpatTaxes, the leading US Tax Software for Expats - allowing expats to file in 30 minutes and starts at a flat fee of 149 euro.
Has the pandemic led to any changes in the number of expats you're seeing come to MyExpatTaxes for help?
NG: Definitely. The pandemic has not only created the necessary awareness around the need to file U.S. taxes as an American Abroad, it also provided a way for U.S. expats to get financial help from their home country.
U.S. Expats certainly had added challenges and struggled to receive their checks more so than U.S. citizens living in the US. After realizing the lack of transparency around the topic MyExpatTaxes aimed to be the thought leader in U.S Expats Taxes and the Stimulus Payments. We achieved this goal through speaking to hundreds of expats through online webinars, answering thousands of support questions and even releasing our Stimulus Check Survey results informing U.S. Expats about what to expect in terms of the payment process.
We are so proud at MyExpatTaxes to have helped thousands of expats become tax compliant and receive their Stimulus Payments in 2020 and excited to continue that support into the new 2021 tax season.
How should expats prepare for collecting their stimulus payment without delay?
NG: From the learnings of our Stimulus Check Survey and feedback from our customers we can solidify a couple of important tips. First, look into opening up a US Bank Account to receive the Stimulus Payments and avoid getting a paper check sent overseas. If you can't create a US Bank Account, try to use a US mailing address. Second, don't paper mail your return, many expats who paper mailed their 2019 tax return still haven't gotten the 1st Stimulus Check. Use a tax firm or software that will allow you to eFile. For example, most U.S. based firms and tax software programs don't allow eFiling for expats that are married to a Non-U.S. Citizen. MyExpatTaxes is the only tax software that allows 99% of expats to eFile their current year tax return! Finally, Claiming Foreign Earned Income Exclusion on the 2020 tax return can lower an expat's Adjusted Gross Income (AGI) so they meet the income threshold for the next round of payments. The threshold limit starts at 75,000 AGI per person.
What are some of the best lessons you've learned during the growth of MyExpatTaxes?
NG: Our main challenge in 2020 was on how to scale quickly without sacrificing high quality customer service. MyExpatTaxes does more than just provide you with a quick, fun and easy to use tax software, we also look to help all our users feel confident about their tax situations through top tier customer support. Even if you are in the base Do-It-Yourself Tier, we will also look to answer all your questions to the best of our ability.
Originally, we had planned for 5x Year over Year Growth in 2020, so when those figures doubled, we had to learn how to scale quickly with minimal disruption during a pandemic. Fortunately, we were able to identify the top talent and hire intentionally to meet the growing demands.