US Expat Tax Returns for Employers: All You Need to Know

| Expats Overseas

How to deal with US expat tax returns?

Living in and moving to the Netherlands presents numerous challenges for employers and expats alike. However, US expats in the Netherlands encounter an additional significant challenge: the obligation to file taxes in both the US and the Netherlands. Even after relocating, US expats are required to continue filing US tax returns in accordance with US tax laws.

How does filing in two countries work?

The US employs a unique citizen-based taxation system that obligates all US citizens to file tax returns, irrespective of their country of residence or workplace. No other country enforces a similar law. Consequently, US expats are required to file both a local tax return in the Netherlands and a tax return in the US.

Is company information sent to the US?

Yes, company bank information might be sent to the US. US Expats must file their income but also separately list all their Dutch bank accounts in additional forms called the Foreign Bank Account Report (FBAR). If a US Expat has signature authority on the employer's account then the US Expat must list the company's account as well including the highest balance in that year. No taxes are levied on these accounts

How about double taxation?

Filing US taxes from abroad involves complex differences from domestic filing. US expats can avoid double taxation through mechanisms like the Foreign Earned Income Exclusion, Foreign Tax Credit, and specific deductions, in line with US-country tax treaties. Often, taxes paid in the country of residence offset most US tax liabilities. It’s advisable to consult an experienced tax consultant to apply the rules correctly.

How to choose the right (US) Tax Preparer

When selecting an expat tax advisor, consider these tips:

  • Look for someone with expertise in international US taxation – it's essential they're well-versed in the rules of filing US expat taxes from overseas. For example, knowledge of the application of the 30% ruling for Expats in the Netherlands. 

  • Check if they're listed in the IRS's Directory; this verifies they're a qualified Certified Public Accountant (CPA) or EA ( Enrolled Agent).

  • Ensure they're committed to personally signing your tax return using their PTIN. This adds a level of responsibility.

  • Choose an advisor who communicates clearly and provides efficient tools for sharing information.

Experts in US Expat Taxation

Expats Overseas, founded by American Expats in the Netherlands, has a clear understanding of how to streamline the process and accurately apply the tax treaty and tax credits.

We offer free information and a free intake to give Employers and US Expats peace of mind. Good to know: there is no obligation if you don’t continue with us. Our team is available for questions every working day by phone and email. 

We highly value personal service and respond quickly to any questions. Our team has assisted more than 18,000 individuals with their tax needs and proudly maintains a 4.8-star rating on Trustpilot with 1000+ reviews. Contact us free of charge and without any obligation.