I am an American athlete or coach working or competing abroad. Do I have to pay US taxes?
If you are a US citizen or green card holder athlete or coach working or training with a sports team overseas, you are still required to file a US tax return. In many cases, expats working abroad do not owe taxes to the US. If you meet certain requirements, the IRS cuts you a break with the Foreign Earned Income Exclusion, the Foreign Housing Exclusion and the Foreign Tax Credit. Of course, there's a catch, you have to file a tax return and make the proper election to benefit from these tax saving opportunities. Otherwise, the IRS could deny you these benefits and make you pay US tax (in addition to your foreign tax bill) on your foreign earned income.
In addition to income tax returns, you may also have to report whether you have foreign bank or investment accounts. Very costly penalties can be imposed if you do not report your foreign accounts correctly. Missing filing a form because you didn't know about it is, unfortunately, not an excuse in the eyes of the IRS.
The US also has tax treaties with over 60 countries. Tax treaties vary from country to country. Treaties also generally provide U.S. athletes with special exemptions from the foreign treaty country's income tax. Tax treaties are complex. It is always best to consult with an international tax expert to determine if a treaty can benefit you.
I haven’t filed a tax return in years? I’ve recently become aware of my filing obligations? What do I do?
If you have been living and working abroad as an athlete and have years of unfiled tax returns, you are not alone. The IRS has recognized that many citizens overseas have not timely filed their U.S. federal income tax returns or Reports of Foreign Bank and Financial Accounts (FBARs), FINCEN Form 114 and is offering a special procedure to get delinquent taxpayers back on track. The IRS presents a very attractive opportunity to come into compliance in a manner that avoids possible IRS enforcement action and the significant penalties that accompany it. If you are a low compliance risk taxpayer, the review of your paperwork will be expedited and the IRS will not assert penalties or pursue follow-up actions. Don't delay. This program is open-ended so the IRS could put an end to it at any time.
We offer U.S. income tax preparation and consulting service to U.S. professional, semi-professional athletes and coaches residing and working overseas and provide you with sound advice with confusing U.S. tax laws. We work with you to actively minimize your U.S. tax liability.
Some athletes are considered as self-employed taxpayers. Additionally, endorsement and appearance income is considered to be self-employment income. However, most professional athletes are treated as employees. This means that athletes in football, soccer, basketball, hockey, track and field and various other sports are all viewed by the IRS as belonging to the same basic occupation and therefore all file very similar tax returns
We at US Expat Tax Help specialize in overseas tax issues. Our offices are located in Germany. We specialize in providing U.S. income tax services to athletes, coaches and trainers throughout Europe. Our founder was also a US expatriate himself for more than 16 years so he understands the tax complexities and needs of the American expat community.