Unlock Your Expat Tax Secrets: How to Maximize Your Savings Living in Colombia!

Moving abroad for a new job or just to be closer to family can be an exciting adventure. However, it comes with important considerations, such as understanding your tax obligations as a U.S. expat living in Colombia. Taxes, at the best of times, are complex and navigating them in two countries can be even more so. Here are some key points to consider when it comes to your tax responsibilities:

1. Tax Residency in Colombia

You do not have to be a Colombian citizen to be obliged to pay Colombian taxes; rather, you must be considered a tax resident based on Colombian law.
Colombian tax laws stipulate that if you spend 183 calendar days or more in the country during a period of 365 days, you may be considered a tax resident at the end of this period.
Nationals living in Colombia may be tax residents if they have a significant financial footprint in the country, such as deriving income from Colombian sources or holding financial assets there.

2. United States Taxes

As a U.S. citizen, you may still have tax obligations in the U.S., regardless of your move to Colombia.
U.S. citizens are taxed on their worldwide income, requiring you to report foreign assets under FATCA if their value exceeds certain thresholds.
Consider filing a Report of Foreign Bank and Financial Accounts (FBAR) if you have financial accounts exceeding $10,000 outside the U.S.

3. Possible Tax Breaks or Benefits

To reduce your overall tax burden, explore tax breaks like the foreign-earned income exclusion and foreign tax credit.
The foreign-earned income exclusion allows you to exclude a certain amount of income earned in Colombia from your U.S. taxes.
Using the foreign tax credit, you can offset U.S. taxes with foreign taxes already paid, eliminating double taxation.

Navigating taxes can be overwhelming, especially in a foreign country. Our team at US Tax Help is here to assist you with your tax obligations. Contact us today at (541) 362-9127 for professional guidance tailored to your specific situation. Remember, understanding and fulfilling your tax responsibilities is essential to financial compliance and peace of mind.