Managing taxes as an expat or digital nomad can be a daunting task, with requirements like reporting worldwide income, claiming foreign tax credits, and completing forms such as the FBAR and FATCA. Although many Americans overseas use tax software for expats, others find that the task is too overwhelming and complex.
That’s where professional tax preparation services come in. Firms that specialize in taxes for U.S. citizens living abroad can take the confusion out of the process and ensure your filings are accurate and on time.
In this article, we’ll review top tax preparation services for expats and digital nomads, examining their expertise, costs, and how they address the unique challenges faced by global taxpayers.
How We Chose Them
We came up with our shortlist of tax service providers by gathering recommendations on digital nomad, expat, and tax-related forums. The providers on this list were chosen based on positive feedback and discussions from actual users. When comparing these four options, we focused on key factors such as price, reviews, and the services included.
Note that Nomad Deals receives affiliate revenue from some (but not all) of these providers, which helps support the free content provided on this site. However, this arrangement does not influence our reviews, and we are careful to highlight both the pros and the cons of each service.
Compare Popular Tax Services
Greenback Expat Tax Services
Excellent for investors, small business
Base price
$530
Base forms
1040, 1116, 2555, all standard schedules
Editor’s Take
Greenback Expat Tax Services is frequently recommended on expat and digital nomad forums for those seeking professional tax help. The firm’s Federal Tax Return Package, which costs $530, includes all standard expat forms (1040, 1116, 2555) and all standard schedules. Also included are up to three Schedule Ks, and 20 bank and brokerage transactions.
Greenback also offers a Small Business package for $640. This service includes Form 1040, 1120, and 1120-S, for up to two business partners. A variety of investment and business-related forms are available on an à la carte basis for additional fees. State tax returns cost an additional $175, and FBAR and FACTA filings cost $115 each.
Overall, we recommend Greenback for filers with investment or business income. Its base plan includes more business-related forms, and per-form fees for niche needs (e.g. Form 8865, 5471) are often lower than competitors such as TFX.
Pros & Cons
✅All standard schedules included on the base plan, including Schedule C.
✅Package designed for small business owners.
✅Solid reputation on expat and digital nomad forums.
❌Entry-level pricing is higher than competitors.
❌Higher fees for state tax returns and some expat forms.
Taxes for Expats (TFX)
Excellent for wage earners
Base price
$450
Base forms
1040, 1116, 2555
Editor’s Take
Taxes for Expats (TFX) is another full-service tax preparation firm that focuses on U.S. expats and digital nomads. TFX’s entry-level Core package costs $450 and includes all standard expat forms (1040, 1116, 2555). For filers with gross income over $100K and/or business income, TFX’s $525 Premier package includes Schedule C, non-wage income, and up to 10 bank and brokerage transactions.
A variety of investment and business-related forms are available on an à la carte basis for additional fees. State tax returns cost an additional $160, FBAR filing costs $85, and FACTA filing costs $100.
We think that TFX is well-suited for wage earners that are eligible for the $450 plan. Higher earners and business owners will likely need to spring for the Premier package, which is comparable in price to Greenback’s services. TFX’s per-form fees are also significantly higher than Greenback in some cases.
Pros & Cons
✅All standard forms included on the base plan.
✅Less expensive than some competitors.
✅Solid reputation on expat and digital nomad forums.
❌Core plan doesn’t cover gross income over $100K.
❌Some business forms only available on the Premier plan.
1040 Abroad
Excellent for budget
Base price
$400
Base forms
1040, 1116, 2555, Schedule A – E
Editor’s Take
1040 Abroad is a highly-rated, expat-focused tax firm with straightforward pricing. Its Standard package costs $400 and includes all standard expat forms (1040, 1116, 2555), plus Schedules A through E. We like that FACTA filing is included on the Standard package at no additional cost, and state tax returns cost just $100. This makes 1040 Abroad’s services significantly less expensive than other firms on our list.
We recommend 1040 Abroad for wage earners with basic tax needs. The company doesn’t provide any public information about investor and business-specific forms, although these may be available for an additional fee.
Pros & Cons
✅Lower price point than competitors.
✅FACTA filing included in entry level package.
✅4.9 rating on Trustpilot.
❌Not focused on small business owners and investors.
❌No information on Schedule K
Guide to Choosing Tax Preparation Services for Expats and Nomads
The U.S. tax code is infamous for its complexity, with severe penalties for errors or missed payments. Americans living overseas, including expats and digital nomads, encounter even greater tax challenges. Hiring a professional takes away the time and stress expended on preparing tax returns.
How much do professional tax services cost?
The cost of professional tax services can vary significantly depending on several factors, including the complexity of your tax situation, the expertise of the professional, and the specific services you require.
When it comes to digital nomads and expats, many firms charge a flat fee for a federal tax return that includes basic forms. The providers on our list charge between $400 and $530 for basic federal returns. Additional tax forms, including state tax returns, often incur additional per-form fees.
Common tax forms for expats and nomads
When choosing a professional tax service, ensure they are well-versed in the specific forms you’ll need to file. Below is an overview of common U.S. tax forms for individuals living abroad:
Form 114 (FBAR – Report of Foreign Bank and Financial Accounts)
- Purpose: To disclose foreign financial accounts that collectively exceed $10,000 in value at any time during the year. This includes overseas bank accounts, brokerage accounts, mutual funds, and similar accounts.
- Filing Deadline: April 15 (with an automatic extension to October 15).
- Who Must File: U.S. citizens, residents, and entities (corporations, partnerships, trusts) with foreign accounts meeting the threshold.
- Filed With: The Financial Crimes Enforcement Network (FinCEN), not the IRS.
Form 2555 (Foreign Earned Income)
- Purpose: To exclude up to a designated amount of foreign earned income ($126,500 for tax year 2024) or deduct foreign housing expenses.
- Eligibility: Requires meeting either the physical presence test (330 days in a foreign country within a 12-month period) or the bona fide residence test (living abroad for a full tax year).
- Who Must File: U.S. citizens or residents who live and work overseas.
Form 1116 (Foreign Tax Credit)
- Purpose: To claim a credit or deduction for foreign taxes paid on income also subject to U.S. taxation, thus avoiding double taxation.
- Who Must File: U.S. taxpayers with foreign income, such as wages, dividends, or rental income, who pay taxes to a foreign government on that income.
Form 8833 (Treaty-Based Return Position Disclosure)
- Purpose: To report when a taxpayer claims benefits (e.g., reduced tax rates or exemptions) under an international tax treaty that modifies U.S. tax laws.
- Who Must File: Nonresident aliens, dual-resident taxpayers, or U.S. citizens claiming treaty benefits that lower their U.S. tax obligations.
- Penalty for Non-Filing: $1,000 per undisclosed treaty position.
Form 8621 (Passive Foreign Investment Companies – PFICs)
- Purpose: To disclose investments in Passive Foreign Investment Companies (PFICs), which are foreign corporations primarily earning passive income (e.g., dividends, interest).
- Who Must File: U.S. taxpayers holding PFIC shares.
- Complexity: Rules for PFICs are intricate, and non-compliance can lead to significant penalties.
Form 8858 (Foreign Disregarded Entities and Foreign Branches)
- Purpose: To report ownership of foreign disregarded entities (single-member LLC equivalents abroad) or foreign branches, along with their income and transactions.
- Who Must File: U.S. persons or entities owning foreign disregarded entities or operating foreign branches.
- Filed With: Attached to the taxpayer’s Form 1120, 1065, or 1040.
Form 5471 (Foreign Corporations)
- Purpose: To report U.S. ownership or control of foreign corporations and provide details on their income, assets, and dealings with U.S. persons.
- Who Must File: U.S. citizens, residents, or entities owning at least 10% of a foreign corporation’s voting stock.
- Complexity: Non-filing penalties are steep (up to $10,000 per instance).
Form 8865 (Foreign Partnerships)
- Purpose: To report interests in foreign partnerships, including income, deductions, and transactions between the partnership and U.S. persons.
- Who Must File: U.S. persons owning 10% or more of a foreign partnership or engaged in transactions with it.
- Penalties: Similar to Form 5471, with steep fines for failure to file.
Other key forms
Investors, business owners, freelancers, and self-employed individuals are required to file additional forms, which are often not included in a professional firm’s entry level package. :
- Schedule C (Profit or Loss From Business): Used to report income or loss from sole proprietorships.
- Schedule D (Capital Gains and Losses): Used to detail gains or losses from selling capital assets.
- Schedule K-1 (Partner’s/Shareholder’s Share of Income, Deductions, Credits, etc.): Outlines a partner’s or shareholder’s portion of income and deductions.
State taxes
Many states in the U.S. require residents or individuals with state-sourced income to file a state income tax return. Expats and nomads might still have state tax obligations, even when living abroad permanently. Choose a tax service experienced in managing state tax filings for expatriates.
If your last residence was in one of the following nine states without state income tax, you generally don’t need to file state taxes as an expat:
- Alaska
- Florida
- Nevada
- New Hampshire (taxes only dividends and interest income)
- South Dakota
- Tennessee
- Texas
- Washington
- Wyoming
Unfiled tax returns
If you have missed filing past tax returns, consult a professional experienced in late filings. They can guide you through programs like the IRS’s streamlined filing compliance procedures or voluntary disclosure options.
Alternatives to Professional Tax Services
Professional tax services are the best option if money is no object. However, for digital nomads and expats with simple tax needs, less expensive alternatives may make more sense.
Do-it-yourself
The IRS provides Free File Fillable Forms and instructions for those comfortable preparing taxes independently. This option requires significant effort and carries a higher risk of errors.
Tax software
Tax software for expats can be a cost-effective choice for straightforward filings, but it may lack the capabilities to address the unique challenges faced by expats. Professional services offer tailored advice and oversight that software often cannot.
FAQs
Are expats and digital nomads required to file U.S. taxes?
Yes. U.S. citizens and residents must report their worldwide income to the IRS, no matter where they reside.
How long do expats have to file U.S. tax returns?
Expats receive an automatic two-month extension to file beyond the regular April 15 deadline. For most expats, the tax filing deadline is June 15. However, taxes owed must still be paid by April 15 to avoid interest penalties.
What tax benefits are available for expats?
- Foreign Earned Income Exclusion (FEIE): Excludes up to $126,500 of foreign-earned income for tax year 2024.
- Foreign Housing Exclusion/Deduction: Allows for the exclusion or deduction of qualifying housing expenses.
- Foreign Tax Credit (FTC): Provides a credit for taxes paid to foreign governments.
Do expats pay foreign taxes?
Many countries tax individuals based on residency. Expats may become tax residents in foreign countries and owe taxes there. Tax treaties between the U.S. and other nations can help minimize or eliminate double taxation.
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